As threat actors operationalize AI to accelerate attacks, they are also leveraging the wider global interest around AI itself as a social engineering lure. In recent months, Microsoft Threat Intelligence has observed a growing number of campaigns that impersonate the branding of popular AI platforms such as ChatGPT, Microsoft Copilot, DeepSeek, and Anthropic’s Claude as lures. These campaigns, which don’t represent compromise of services, span phishing, malvertising, and search engine optimization (SEO)-driven attacks that ultimately lead to credential theft, financial fraud, or malware infection.

Threat actors are quick to capitalize on highly anticipated launches or emerging trends, leveraging trusted branding and exploiting user curiosity to improve the success rates of their campaigns. Despite the AI-themed lures, however, these campaigns combine longstanding tactics, such as urgency-driven messaging, abuse of trusted services, and multi-stage redirection chains that require user interaction to evade detection.

While traditional lures like invoices, payment notifications, or delivery alerts remain effective and continue to be widely used, AI-themed lures reflect a shift in social engineering that is likely to persist as a long-term tactic used by threat actors, from cybercriminal groups to nation states. Notably, Microsoft Threat Intelligence has observed the initial access broker Storm-3075 employing AI-themed malvertising to deliver payloads, including malware signed by the malware-signing-as-a-service (MSaaS) offering attributed to the financially motivated threat actor Fox Tempest, on behalf of multiple downstream actors.

This blog details several of the campaigns observed by Microsoft Threat Intelligence in the past few months that used AI brands and references as lures, and provides guidance to help users and organizations detect, mitigate, and respond to these threats. Importantly, Microsoft believes that the activity noted in this blog is purely abuse of AI brand names as lures, not reflecting a compromise of any referenced vendor. As threat actors scale their operations with AI, organizations should leverage AI-powered security capabilities to enhance visibility, automate detection, and accelerate response across email, identity, and endpoint surfaces.

ChatGPT-themed lure leads to phishing kit collecting credit card data

On May 5, 2026, Microsoft detected a ChatGPT-themed phishing attack that delivered malicious URLs leading to phishing pages that collected credit card and personal information such as names and addresses. This phishing activity, which consisted of 4,500 emails sent to targets in South Africa (97%), was part of a broader campaign using similar themes and infrastructure. We also observed this campaign delivering as much as 100,000 emails on a single day to targets in Switzerland, Austria, and South Africa affecting a broad range of industries, including higher education and professional services.

The emails used the sender display name ChatGPT and the subject “To ensure your ChatGPT Plus continues to work – please update your payment method”. The emails posed as an urgent request to update the ChatGPT Plus subscription payment method. They warned the recipient that if a new payment method was not provided within seven days, the account would be downgraded to a free plan. A ChatGPT logo was prominently displayed at the top of the email body.

The phishing email contained a clickable Update payment method button, which did not directly send users to the attacker-controlled site. Instead, users were redirected through a series of legitimate and abused redirector hops. This is a common technique used by threat actors to exploit the reputation of trusted domains and bypass email filters, evade detection, and track victim engagement.

Targets were first directed to grupoconstat[.]bitrix24[.]com[.]br (a legitimate customer relationship management (CRM) service), which redirected to awstrack[.]me (an Amazon domain used for tracking email opens and clicks), which in turn redirected to a Rebrandly URL (a legitimate but often abused URL shortener service). Targets were finally sent to a likely legitimate but compromised domain legendarytrendsbay[.]shop where the threat actor had placed the phishing page in the /ChatGPT/ folder.

The landing page did not immediately display the phishing content. It first required visitors to pass a custom CAPTCHA, which was a simple Update payment button. If they clicked this button, users were sent to the next page where personal information, including first name, last name, and address was collected. The final page then collected the name, credit card number, expiration date, and card verification code.

Claude-themed phishing campaign collected credentials and access tokens

From April 20 to 22, 2026, Microsoft observed a phishing campaign impersonating Anthropic-branded services to target users with account-related lures tied to the Claude AI platform. The campaign sent phishing emails to targets across more than 2,000 organizations, primarily in the United States (62%), the United Kingdom (18%), and India (9%). While this campaign impacted a broad range of industries, it was most notably focused on information technology (56%), other business entities (21%), and financial services (8%).

The campaign used enforcement-themed messaging claiming that the recipient’s account was in violation of acceptable use policies and required immediate action. The emails impersonated Anthropic’s popular AI service Claude using the display names Anthropic Teams and Anthropic PBC, masquerading as legitimate account-related communications. Subject lines followed a consistent structure of “Claude Appeal Request” combined with date elements.

The email body was delivered as HTML and included Anthropic and Claude branding. The message informed recipients that their account was violating “AUP (Account Usage Policy)” and that Anthropic had “initiated an appeal procedure”. The message instructed recipients to review the attached material to access their appeal and indicated that Claude features would be limited pending review.

The email attachment was a PDF named Fill and Sign Claude Appeal Form.pdf, which was designed to resemble an official process tied to Claude account enforcement. The document presented an appeal workflow, prompting users to copy an appeal ID and click the “Claude Appeal” link, which initiated the credential harvesting process.

When clicked, the link embedded in the PDF directed users to an attacker-controlled domain, dash.awaydouble[.]org. The initial landing page displayed a Cloudflare verification prompt, presented as confirming the user was arriving from a “legitimate session”. This step likely served as a gating mechanism to impede automated analysis and sandbox detonation.

Users who completed the verification were redirected to another Claude-themed landing page hosted on servicing.pureplantcravings[.]com. This page was named “Account Appeal Notice” and contained “Account Security & Compliance” message informing users that their account had been flagged for repeated violations of usage policies. The page provided a reference date and a one-time access code, prompting users to copy the code and continue.

Clicking “Continue” redirected users to the final page, which was not available at the time of analysis. Source code revealed conditional redirect logic that routed users to one of two final landing pages, depending on whether the site was accessed through mobile device or a desktop system.

While the final redirect destination was no longer active at the time of analysis, infrastructure overlap, including shared intermediate domains and consistent redirect logic, strongly suggested that users were ultimately presented with a Microsoft sign-in experience. This final stage is consistent with adversary-in-the-middle (AiTM) tactics designed to intercept authentication tokens and facilitate account compromise.

“Awesome AI Windows Plugin” malvertising deploys Vidar stealer

Since at least early 2026, Microsoft Threat Intelligence has observed malvertising campaigns that use AI-themed terms such as “Awesome AI Windows Plugin” and “Flux Pro AI” in social engineering lures in malicious popups, in malware executable names, and GitHub repository and folder names throughout the attack chain. These campaigns are notable for their scale and velocity, moving from launch to mass impact within hours and infecting tens to hundreds of thousands of endpoints. The malware delivered in these campaigns is frequently code-signed, lending an additional layer of perceived trust to both the operating system and the user.

Microsoft attributes this malvertising activity to an initial access broker and malware distributor tracked as Storm-3075. We assess that Storm-3075 delivers final payloads on behalf of multiple downstream actors. While the example campaign described in this section delivered Vidar Stealer, we have also observed this campaign distributing Lumma Stealer, Hijack Loader, and Oyster.

On March 13, 2026, a single campaign run targeted over 66,000 devices. Microsoft has revoked the related signing certificate and GitHub has taken down the associated repository, helping to prevent tens of thousands of additional infections. Given the nature of the attack source, majority of impacted devices were likely consumer rather than enterprise endpoints. Telemetry showed global distribution, with the top affected countries being Japan, South Africa, the United States, and France.

Analysis of the redirection chain determined that the attack likely originated from free movie streaming sites. Infections on such sites typically begin when users interact with embedded movie players or click popups. Malvertising embedded in such sites can redirect users to a range of unwanted content, including malware. In this campaign, users were redirected to a page advertising a download for an “Awesome AI Windows plugin”, a fictitious product name. The plugin purported to help users watch free, high-quality videos, a lure aligned with the context of users already streaming free or pirated content.

Clicking the download button retrieved an executable named ProFluxeFlowAi-win-Setup.exe, which the user then had to manually launch. The file name mimicked a legitimate product with a similar name, Flux Pro AI, which supports text, image, and video creation. This lure reinforced the perceived legitimacy of the executable within the streaming of free movies context. The executable itself was hosted on GitHub in a repository named shippingtechnologymovie under a folder named AI-techVideos, both tailored to the AI video helper narrative.

The malware executable was signed with a fraudulently obtained Microsoft-issued code-signing certificate obtained through Artifact Signing (certificate thumbprint: 4f5c5b3ef45cfff7721754487a86aeff9a2e6e32). Microsoft attributes the signing service used by the threat actor to Fox Tempest, a financially motivated threat actor operating a malware-signing-as-a-service (MSaaS) offering used by other threat actors. Microsoft has revoked over one thousand code signing certificates attributed to Fox Tempest. In May 2026, Microsoft’s Digital Crimes Unit (DCU), in partnership with Resecurity, facilitated a disruption of Fox Tempest infrastructure and access model.   

Signing malware through such a service is expensive; however, for a threat actor targeting tens or hundreds of thousands of infections, the cost can be justified by the additional level of trust signed binaries imply to both the operating system and the user. Signed malware also tends to exhibit lower detection rates early in the infection lifecycle, extending the window of effective distribution.

Another notable feature of the malware is that, immediately after launch, it displays a window with a “Continue” checkmark and does not proceed until the box is clicked. This extra user interaction step is uncommon. We assess that this technique is intended to hide the malicious functionality from sandboxes and automated analysis environments that cannot dynamically perform the click. Until the user clicks “Continue,” the malware performs no suspicious activity on the operating system. This technique is functionally analogous to the CAPTCHAs frequently seen in phishing attacks.

Once the user clicks “Continue”, the executable drops and runs a malicious Python-based downloader. Both the Python interpreter and the downloader script are saved in the \AppData\Local\ folder as pythonw.exe and LICENSE.txt, respectively. The malicious script runs shellcode that loads the next-stage malware from the command-and-control (C2) domain brokeapt[.]com. The final payload observed in this campaign was Vidar infostealer.

Fake DeepSeek V4 installers on GitHub delivered Vidar Stealer

In April 2026, Microsoft identified a social engineering campaignsocial-engineering campaign that leveraged interest in the newly released DeepSeek V4 by impersonating it through a fraudulent GitHub repository and organization. The campaign abused GitHub’s release-asset infrastructure to deliver information-stealing malware such as Vidar stealer. Search engines increased the exposure of the malicious repository, exacerbated by the fact that DeepSeek did not publish an official V4 repository on GitHub.

Our investigation shows the DeepSeek lure is one identity in a broader rotating brand-abuse ecosystem that recycles whichever AI tool is trending into a fresh malware download experience. After discovering this activity, Microsoft shared the details with GitHub, and GitHub has since taken down the malicious organization, repository, and operator account.

On April 24, 2026, within hours of DeepSeek officially previewing its new V4 frontier model, a threat actor initiated the attack chain that can be summarized as:

1. Resource development on GitHub, all within roughly 45 minutes: A new GitHub organization (DeepSeek-V4), a single repository (deepseek-V4), and a release tag (deepseek-V4). The repository was decorated with stolen DeepSeek branding, real benchmark data, and SEO-optimized topics.
2. Search-driven discovery: Users found the repository through GitHub repository search, search engines, social sharing, and AI-assisted search results pointing to the lure page. The repository’s llms.txt and topic taxonomy were designed to be discovered by both classical search engines and large-language-model-powered search; observed top-rank results on search engines are consistent with that design, though we did not observe paid advertising and therefore do not assess this as malvertising.
3. Archive download from GitHub’s release-asset CDN: The release page hosted two archives, deepseek-v4-pro_x64.7z and deepseek-v4-flash_x64.7z.
4. User extraction: Users needed to extract the executable from the archive using common Windows archive tools.
5. Payload execution: The archives contained a heavyweight Win32 PE that masqueraded as the DeepSeek installer. At least one confirmed victim endpoint revealed the extracted payload landed at: C:\Users\<user>\Downloads\Programs\IA DeepSeek-V4\deepseek-v4-flash_x64.exe.
6. Active payload rotation: The threat actor actively rotated archive content while preserving file names and the release page. We observed at least three distinct archive hash generations in three days.

Microsoft Defender telemetry observed the first victim download approximately four hours later. The threat actor’s operational tempo on April 24, 2026, is consistent with a prepared, rehearsed workflow. The repository was designed to be convincing at a glance. It accumulated 91 stars and 27 forks within four days, though the proportion of organic versus inflated engagement is not independently confirmed. The attacker invested in several credibility-building elements:

• Stolen branding: The repository’s README and assets folder embedded the legitimate DeepSeek whale logo, copied from the real deepseek-ai/DeepSeek-V2 repository.
• Real benchmark data as lure: The release notes displayed authentic DeepSeek V4 benchmark scores against Claude Opus 4.6, GPT-5.4, and Gemini 3.1 Pro, copied from the official release announcement.
• Action-oriented SEO topics: The repository was tagged with deepseek-v4, deepseek-v4-download, deepseek-v4-downloader, deepseek-v4-install, and deepseek-v4-installer, which are queries users are expected to use when intent-shopping for an installer.
• LLM-aware discoverability: A top-level llms.txt file repeated the same SEO copy in a format aimed at AI-assisted search engines.

On closer inspection, the staging gives the operation away: the repository contained only a README, LICENSE, llms.txt, and stub assets/ and inference/ directories with no real model code; all nine commits were made in a single burst on April 24, 2026 by a single author; the README claimed an MIT license while repository metadata specified Apache 2.0.

Once the lure was live, search engines increased the exposure of the malicious repository. We tested the queries an interested user would naturally try when looking for DeepSeek V4 on GitHub or the open web. In a snapshot captured on April 28, 2026, the results were as follows (search results are volatile and may differ at the time of reading):

The 7z archives hosted on GitHub contained a loader executable such as SHA-256: 5455341ed1bbe75a664fca2dd0794c508e1874f75360253a7ff5bc119bc92d80. The loader was observed downloading and installing Vidar stealer and potentially additional malware.

Lastly, Microsoft observed that the DeepSeek-themed payloads share infrastructure with a much larger rotating fake-AI / fake-tool ecosystem. The same shared loader hash (SHA-256 5455341…) appeared under file names impersonating GPT-5.5, Claude Code, Kimi, Seedance, Gemma, GrokCLI, Manus AI, FraudGPT, and others (see table below). Public research from Trend Micro, Zscaler ThreatLabz, and Huntress describe the same broader ecosystem, with TradeAI.exe, OpenClaw_x64.7z, WormGPT_x64.7z, and DeepSeekAI_agent_x64.7z appearing as sibling lures and the downstream payload set documented as Vidar plus GhostSocks.

Mitigation and protection guidance

To defend against social engineering campaigns that leverage AI brands as lures, Microsoft recommends the following mitigation measures:

• Configure automatic attack disruption in Microsoft Defender XDR. Automatic attack disruption is designed to contain attacks in progress, limit the impact on an organization’s assets, and provide more time for security teams to remediate the attack fully.
• Enforce multifactor authentication (MFA) on all accounts, remove users excluded from MFA, and strictly require MFA from all devices in all locations at all times.
• Use the Microsoft Authenticator app for passkeys and MFA, and complement MFA with conditional access policies, where sign-in requests are evaluated using additional identity-driven signals.
• Conditional access policies can also be scoped to strengthen privileged accounts with phishing resistant MFA.
• Enable Zero-hour auto purge (ZAP) in Office 365 to quarantine sent mail in response to newly acquired threat intelligence and retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.
• Configure Microsoft Defender for Office 365 Safe Links to recheck links on click. Safe Links provides URL scanning and rewriting of inbound email messages in mail flow and time-of-click verification of URLs and links in email messages, other Microsoft Office applications such as Teams, and other locations such as SharePoint Online. Safe Links scanning occurs in addition to the regular anti-spam and anti-malware protection in inbound email messages in Microsoft Exchange Online Protection (EOP). Safe Links scanning can help protect your organization from malicious links that are used in phishing and other attacks.
• Invest in advanced anti-phishing solutions that monitor and scan incoming emails and visited websites. For example, organizations can leverage web browsers like Microsoft Edge that automatically identify and block malicious websites, including those used in this phishing campaign, and solutions that detect and block malicious emails, links, and files.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Enable network protection to prevent applications or users from accessing malicious domains and other malicious content on the internet.

Microsoft Defender detections

Microsoft Defender customers can refer to the list of applicable detections below. Microsoft Defender coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently:

• Threat Intelligence Briefing agent
• Phishing Triage agent
• Threat Hunting agent
• Dynamic Threat Detection agent

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs.

Threat intelligence reports

Microsoft Defender XDR customers can use the following threat analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide the intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments.

• Threat overview profile: Evolving phishing threats

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Indicators of compromise

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky.

To hear stories and insights from the Microsoft Threat Intelligence community about the ever-evolving threat landscape, listen to the Microsoft Threat Intelligence podcast.

The post AI brands as bait: How threat actors are using the AI hype in social engineering appeared first on Microsoft Security Blog.

Phishing campaigns continue to improve sophistication and refinement in blending social engineering, delivery and hosting infrastructure, and authentication abuse to remain effective against evolving security controls. A large-scale credential theft campaign observed by Microsoft Defender Research exemplifies this trend, using code of conduct-themed lures, a multi-step attack chain, and legitimate email services to distribute fully authenticated messages from attacker-controlled domains.

The campaign targeted tens of thousands of users, primarily in the United States, and directed them through several stages of CAPTCHA and intermediate staging pages designed to reinforce legitimacy while filtering out automated defenses. The lures in this campaign used polished, enterprise-style HTML templates with structured layouts and preemptive authenticity statements, making them appear more credible than typical phishing emails and increasing their plausibility as legitimate internal communications. Because the messages contained concerning accusations and repeated time-bound action prompts, the campaign created a sense of urgency and pressure to act.  

The attack chain ultimately led to a legitimate sign-in experience that was part of an adversary‑in‑the‑middle (AiTM) phishing flow, which allowed the attackers to proxy the authentication session and capture authentication tokens that could provide immediate account access. Unlike traditional credential harvesting, AiTM attacks intercept authentication traffic in real time, bypassing non-phishing-resistant multifactor authentication (MFA).

In this blog, we’re sharing our analysis of this campaign’s lures, infrastructure, and techniques. Organizations can defend against financial fraud initiated through phishing emails by educating users about phishing lures, investing in advanced anti-phishing solutions like Microsoft Defender for Office 365 and configuring essential email security settings, and encouraging users to employ web browsers that support SmartScreen. Organizations can also enable network protection, which lets Windows use SmartScreen as a host-based web proxy.

Multi-step social engineering campaign leading to credential theft

Between April 14 and 16, 2026, the Microsoft Defender Research team observed a series of sophisticated phishing campaigns targeting more than 35,000 users across over 13,000 organizations in 26 countries, with majority of targets located in the United States (92%). The campaign did not focus on a single vertical but instead impacted a broad range of industries, most notably Healthcare & life sciences (19%), Financial services (18%), Professional services (11%), and Technology & software (11%). Messages were distributed in multiple distinct waves between 06:51 UTC on April 14 and 03:54 UTC on April 16. 

Emails in this campaign posed as internal compliance or regulatory communications, using display names such as “Internal Regulatory COC”, “Workforce Communications”, and “Team Conduct Report”. Subject lines included “Internal case log issued under conduct policy” and “Reminder: employer opened a non-compliance case log”.

Message bodies claimed that a “code of conduct review” had been initiated, referenced organization-specific names embedded within the text, and instructed recipients to “open the personalized attachment” to review case materials. At the top of each message, a notice stated that the message had been “issued through an authorized internal channel” and that links and attachments had been “reviewed and approved for secure access”, reinforcing the email’s purported legitimacy. To further support the confidentiality of the supposed review, the end of each message contained a green banner stating that the contents had been encrypted using Paubox, a legitimate service associated with HIPAA-compliant communications.

Analysis of the sending infrastructure indicated that the campaign emails were sent using a legitime email delivery service, likely originating from a cloud-hosted Windows virtual machine. The messages were sent from multiple sender addresses using domains that are likely attacker-controlled.

Each campaign email included a PDF attachment with filenames such as Awareness Case Log File – Tuesday 14th, April 2026.pdf and Disciplinary Action – Employee Device Handling Case.pdf. The attachment provided additional context about the supposed conduct review, including a summary of the review process and instructions for accessing supporting documentation. Recipients were directed to click a “Review Case Materials” link within the PDF, which initiated the credential harvesting flow.

When clicked, users were initially directed to one of two attacker-controlled domains (for example, acceptable-use-policy-calendly[.]de or compliance-protectionoutlook[.]de). These landing pages displayed a Cloudflare CAPTCHA, presented as a mechanism to validate that the user was coming “from a valid session”. This CAPTCHA likely served as a gating mechanism to impede automated analysis and sandbox detonation. 

After completing the CAPTCHA, users were redirected to an intermediate site designed to prepare them for the final stage of the attack. This page informed users that the requested documentation was encrypted and required account authentication. While this stage of the attack has several hallmarks of device code phishing, we were only able to confirm the AITM portion of the attack chain.

After clicking the provided “Review & Sign” button, users were presented with a sign-in prompt requesting their email address.

After submission, users were required to complete a second CAPTCHA involving image selection.

Once these steps were completed, users were shown a message indicating that verification was successful and that their “case” was being prepared.

Following these steps, users were redirected to a third site hosting the final stage of the attack. Analysis of the underlying code indicates that the final destination varied depending on whether the user accessed the workflow from a mobile device or a desktop system.

On the final page, users were informed that all materials related to their code of conduct review had been “securely logged”, “time-stamped”, and “maintained within the organization’s centralized compliance tracking system”. They were then prompted to schedule a time to discuss the case, which required signing in to their account.

Selecting the “Sign in with Microsoft” option redirected users to a Microsoft authentication page, initiating an AiTM session hijacking flow designed to capture authentication tokens and compromise user accounts.

Mitigation and protection guidance

Microsoft recommends the following mitigations to reduce the impact of this threat. Check the recommendations card for the deployment status of monitored mitigations.

• Review the recommended settings for Exchange Online Protection and Microsoft Defender for Office 365 to ensure your organization has established essential defenses and knows how to monitor and respond to threat activity.
• Invest in user awareness training and phishing simulations. Attack simulation training in Microsoft Defender for Office 365, which also includes simulating phishing messages in Microsoft Teams, is one approach to running realistic attack scenarios in your organization.
• Enable Zero-hour auto purge (ZAP) in Defender for Office 365 to quarantine sent mail in response to newly acquired threat intelligence and retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.
• Responders could also manually check for and purge unwanted emails containing URLs and/or Subject fields that are similar, but not identical, to those of known bad messages. Investigate malicious email that was delivered in Microsoft 365 and use Threat Explorer to find and delete phishing emails.
• Turn on Safe Links and Safe Attachments in Microsoft Defender for Office 365.
• Enable network protection in Microsoft Defender for Endpoint.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Enable password-less authentication methods (for example, Windows Hello, FIDO keys, or Microsoft Authenticator) for accounts that support password-less. For accounts that still require passwords, use authenticator apps like Microsoft Authenticator for multifactor authentication (MFA). Refer to this article for the different authentication methods and features.
  • Conditional access policies can also be scoped to strengthen privileged accounts with phishing resistant MFA.
• Configure automatic attack disruption in Microsoft Defender XDR. Automatic attack disruption is designed to contain attacks in progress, limit the impact on an organization’s assets, and provide more time for security teams to remediate the attack fully.

Microsoft Defender detections

Microsoft Defender customers can refer to the list of applicable detections below. Microsoft Defender coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently:

• Threat Intelligence Briefing agent
• Phishing Triage agent
• Threat Hunting agent
• Dynamic Threat Detection agent

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs.

Threat intelligence reports

Microsoft Defender XDR customers can use the following threat analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide the intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments.

• Threat overview profile: Adversary-in-the-middle credential phishing
• Threat overview profile: Evolving phishing threats

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Hunting queries

Microsoft Defender XDR customers can run the following advanced hunting queries to find related activity in their networks:

Campaign emails by sender address

The following query identifies emails associated with this campaign using a message’s sending email address.

EmailEvents
| where SenderMailFromAddress in (" cocpostmaster@cocinternal.com "," nationaladmin@gadellinet.com ","
nationalintegrity@harteprn.com”,” m365premiumcommunications@cocinternal.com”,” documentviewer@na.businesshellosign.de”)

Indicators of compromise

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky.

To hear stories and insights from the Microsoft Threat Intelligence community about the ever-evolving threat landscape, listen to the Microsoft Threat Intelligence podcast.

The post Breaking the code: Multi-stage ‘code of conduct’ phishing campaign leads to AiTM token compromise appeared first on Microsoft Security Blog.

During the first quarter of 2026 (January-March), Microsoft Threat Intelligence detected approximately 8.3 billion email-based phishing threats, with monthly volumes declining slightly from 2.9 billion in January to 2.6 billion in March. By the end of the quarter, QR code phishing emerged as the fastest-growing attack vector, more than doubling over the period, while CAPTCHA-gated phishing evolved rapidly across payload types. Overall, 78% of email threats were link-based, while malicious payloads accounted for 19% of attacks in January—boosted by large HTML and ZIP campaigns—before settling at 13% in both February and March. Credential phishing remained the dominant objective behind malicious payloads throughout the quarter. This shift toward link-based delivery, combined with the payload trends, suggests that threat actors increasingly preferred hosted credential phishing infrastructure over locally-rendered payloads as the quarter progressed.

This blog provides a view of email threat activity across the first quarter of 2026, highlighting key trends in phishing techniques, payload delivery, and threat actor behavior observed by Microsoft Threat Intelligence. We examine shifts in QR code phishing, CAPTCHA evasion tactics, malicious payloads, and BEC activity, analyze how disruption efforts and infrastructure changes influenced threat actor operations, and provide recommendations and Microsoft Defender detections to help mitigate these threats. By bringing these trends together, this blog can help defenders understand how email-based attacks are evolving and where to focus detection, mitigation, and user protection strategies.

Tycoon2FA disruption impact

Since its emergence in August 2023, Tycoon2FA has rapidly become one of the most widespread PhaaS platforms, leveraging adversary-in-the-middle (AiTM) techniques to attempt to defeat non-phishing-resistant multifactor authentication (MFA) defenses. The group behind the PhaaS platform (tracked by Microsoft Threat Intelligence as Storm-1747) leases malicious infrastructure and sells phishing kits that impersonate various enterprise application sign-in pages and incorporate evasion tactics, such as fake CAPTCHA pages.

The quarter began with Tycoon2FA in a period of reduced activity. January volumes represented a 54% decline from December 2025, marking the second consecutive month of sharp decreases. While post-holiday seasonal effects may have contributed to this decrease in volume, some of the reduction might also have been the result of Microsoft’s Digital Crimes Unit disruption of RedVDS, a service used by many Tycoon2FA customers to distribute malicious email campaigns.

After surging 44% in February, phishing attacks pointing to Tycoon2FA fell 15% in March driven largely by the effects of a coordinated disruption operation. In early March 2026, Microsoft’s Digital Crimes Unit, in coordination with Europol and industry partners, took action to disrupt Tycoon2FA’s infrastructure and operations, significantly impairing the platform’s hosting capabilities. While Tycoon2FA-linked messages continued to circulate after the disruption, almost one-third of March’s total volume was concentrated in a three-day period early in the month; daily volumes for the remainder of March were notably lower than historical averages, and targets’ ability to reach active phishing pages was substantially reduced.

Tycoon2FA’s infrastructure composition evolved multiple times during the first three months of 2026. In January, Tycoon2FA domains started shifting toward newer generic top-level domains (TLDs) such as .DIGITAL, .BUSINESS, .CONTRACTORS, .CEO, and .COMPANY, moving away from previous commonly used TLDs or second-level domains like .SA.COM, .RU, and .ES. This trend became even more well-established in February. Following the March disruption, however, Microsoft Threat Intelligence observed a notable increase in Tycoon2FA domains with .RU registrations, with more than 41% of all Tycoon2FA domains using a .RU TLD since the last week of March.

Additionally, toward the end of March, we saw Tycoon2FA moving away from Cloudflare as a hosting service and now hosts most of its domains across a variety of alternative platforms, suggesting the group is attempting to find replacement services that offer comparable anti-analysis protections.  

QR code phishing attacks

In recent years, QR codes have rapidly emerged as a preferred tool among phishing threat actors seeking to bypass traditional email defenses. By embedding malicious URLs within image-based QR codes in the body of an email or within the contents of an attachment, threat actors attempt to exploit the limitations of text-based scanning engines and redirect victims to phishing sites on unmanaged mobile devices.

The most significant shift in Q1 2026 was the rapid escalation of QR code phishing, with attack volumes increasing from 7.6 million in January to 18.7 million in March, a 146% increase over the quarter. After an initial 35% decline in January (continuing a late-2025 downtrend), volumes reversed course dramatically, growing 59% in February and another 55% in March. By the end of the quarter, QR code phishing had reached its highest monthly volume in at least a year.

PDF attachments were the dominant delivery method throughout the quarter, growing from 65% of QR code attacks in January to 70% in March. While the overall volume of DOC/DOCX payloads containing malicious QR codes steadily increased each month, their share of overall delivery payloads decreased from 31% in January to 24% in March. A notable late-quarter development was the emergence of QR codes embedded directly in email bodies, which surged 336% in March. While still a small share of total volume (5%), this approach eliminates the need for an attachment altogether and highlights a shift in threat actor delivery methods that defenders should continue to monitor.

CAPTCHA tactics

Threat actors use CAPTCHA pages to delay detection and increase user interaction. These pages function as a visual decoy, giving the appearance of a legitimate security check while concealing a transition to malicious content. By forcing users to engage with the CAPTCHA before accessing the payload, threat actors reduce the likelihood of automated scanning tools identifying the threat and increase the chances of successful credential harvesting or malware delivery. Additionally, fake CAPTCHAs are used in ClickFix attacks to trick users into copying and executing malicious commands under the guise of human verification, allowing malware to bypass conventional security controls.

After declining in both January (-45%) and February (-8%), CAPTCHA-gated phishing volumes exploded in March, more than doubling (+125%) to 11.9 million attacks, the highest volume observed over the last year.

The most notable aspect of Q1 CAPTCHA trends was the rapid rotation of delivery methods, as threat actors appeared to actively experiment with which payload formats most effectively evade email defenses:

• HTML attachments started the year as the most common method to deliver CAPTCHA-gated phishing (37% in January), but dropped 34% in February, hitting its lowest monthly volume since August 2025. Although their volume more than doubled in March, hitting an annual monthly high, HTML files were still only the second-most common delivery method to close the quarter.

• SVG files, which had seen consecutive months of decreasing volumes, grew by 49% in February at the same time nearly every other delivery payload type decreased. Because of this, it was the most common delivery method for the month, which had not happened since November 2025. This one-month spike reversed itself in March, however, and the number of SVG files delivering CAPTCHA-gated phish fell by 57%, accounting for just 7% of delivery payloads.
• PDF files saw a meteoric rise in volume during the first quarter of the year. After seeing steady month-over-month declines since July 2025, and hitting an annual monthly low point in January 2026, the number of PDF attachments leading to CAPTCHA-gated phishing sites more than quadrupled in March (+356%). Not only did it retake its spot as the most common delivery method for these attacks since last July, but it eclipsed its annual high by more than 37%.
• DOC/DOCX files, which didn’t make up more than 9% of CAPTCHA-gated phishing payloads over the previous nine months, increased almost five times (+373%) in March to account for 15% of payloads.
• Email-embedded URLs, which had once delivered more than half of CAPTCHA-gated phish at the end of August 2025, hit an eight-month low after falling 85% between December and February. While their volume nearly doubled in March, they remained well below late-2025 levels.

Another notable shift in CAPTCHA-gated phishing attacks was the erosion of Tycoon2FA’s impact on the landscape. At the end of 2025, more than three-quarters of CAPTCHA-gated phishing sites were hosted on Tycoon2FA infrastructure. This share decreased significantly over the course of the first three months of 2026, falling to just 41% in March. This broadening of CAPTCHA-gated phishing sites being used by an increasing number of threat actors and phishing kits, combined with the overall surge in volume, indicates that this technique is becoming a more entrenched component of the phishing playbook rather than a specialty of a small number of tools.

Three-day campaign delivers CAPTCHA-gated phishing content using malicious SVG attachments

Between February 23 and February 25, 2026, a large, sustained campaign sent more than 1.2 million messages to users at more than 53,000 organizations in 23 countries. Messages in the campaign included a number of different themes, including an important 401K update, a credit hold warning, a question about a received payment, a payment request for a past due invoice, and a voice message notification.

Many of the messages contained a fake confidentiality disclaimer to enhance the credibility of the messages and provide a proactive excuse about why a recipient may have mistakenly received an email that may not be applicable to them.

Attached to each message was an SVG file that was named to appropriately match the theme of the email. All the file names included a Base64-encoded version of the recipient’s email address. Example of file names used in the campaign include the following:

• <Recipient Email Domain>_statements_inv_<Base64-encoded Email Address>.svg
• 401K_copy_<Recipient Name>_<Base64-encoded Email Address>_241.svg
• Check_2408_Payment_Copy_<Recipient First Name>_<Base64-encoded Email Address>_241.svg
• INV#_1709612175_<Base64-encoded Email Address>.svg
• Listen_(<Base64-encoded Email Address>).svg
• PLAY_AUDIO_MESSAGE__<Recipient Name>_<Base64-encoded Email Address>_241.svg

If an attached SVG file was opened, the user’s browser would open locally and fetch content from one of the three following hostnames:

• bouleversement.niovapahrm[.]com
• haematogenesis.hvishay[.]com
• ubiquitarianism.drilto[.]com

Initially, the user would be shown a “security check” CAPTCHA. Once the CAPTCHA had been successfully completed, the user would then be shown a fake sign-in page used to compromise their account credentials.

Malicious payloads

Credential phishing tightened its grip on the malicious payload landscape across Q1, growing from 89% of all payload-based attacks in January to 95% in February before settling at 94% in March. These credential phishing payloads either linked users to phishing pages or locally loaded spoofed sign-in screens on a user’s device. Traditional malware delivery continued its long-term decline, representing just 5–6% of payloads by the end of the quarter.

The most striking payload trend was the volatility across file types, driven by large campaigns that created dramatic week-to-week swings:

• HTML attachments started Q1 as the leading file type (37% of payloads in January), fell to an annual low in February (-57%), then nearly tripled in March (+175%). This volatility was largely campaign-driven, with concentrated activity in the first half of January and the third week of March.
• Malicious PDFs followed a steady upward trajectory, increasing 38% in February and another 50% in March to reach their highest monthly volume in over a year. By March, PDFs accounted for 29% of payloads, up from 19% in January.
• ZIP/GZIP attachments were similarly volatile by nearly doubling in January (+94%), dropping 38% in February, then surging 79% in March. Threat actors commonly use ZIP files to circumvent Mark of the Web (MOTW) protections.
• SVG files emerged briefly in February as a notable delivery method (with a 50% volume increase) before declining 32% in March, mirroring the pattern seen in CAPTCHA-gated phishing.

Large-scale HTML phishing campaign hosts content on multiple PhaaS infrastructures

On March 17, 2026, Microsoft Threat Intelligence observed a massive phishing campaign that drove a significant surge in malicious HTML attachments during the month. The campaign involved more than 1.5 million confirmed malicious messages sent to over 179,000 organizations across 43 countries, accounting for approximately 7% of all malicious HTML attachments observed in March.

All messages in this campaign were likely sent using the same tool or service, which exhibited several distinct and highly consistent characteristics. Most notably, sender addresses across the campaign featured excessively long, keyword‑stuffed usernames that embedded URLs, tracking identifiers, and service references. These usernames were crafted to resemble legitimate transactional, billing, or document‑related notification senders. Examples of observed sender usernames include:

• eReceipt_Payment_Alert_Noreply-/m939k6d7.r.us-west-2.awstrack.me/L0/%2F%2Fspectrumbusiness.net%2Fbilling%2F/2/010101989f2c1f29-ab5789bd-1426-4800-ae7d-877ea7f61d24-000000/LHnBIXX0VmCLVoXwNWtt23hGCdc=439/us02web.zoom.nl/j/81163775943?pwd=bLoo4JaWavsiTAuLWNoRsmbmALwjLB.1-qq8m2tzd
• Center-=AAP1eU7NKykAABXNznVa8w___listenerId=AAP1eU7NKykAABXNznVa8w___aw_0_device.player_name=Chrome___aw_0_ivt.result=unknown___cbs=9901711___aw_0_azn.zposition=%5B%22undefined%22%5D___us_privacy=___aw_0_app.name=Second+Screen___externalClickUrl=otdk-takaki-h
• DocExchange_Noreply-m939k6d7.r.us_west_2.awstrack.me/L0/%2F%2Fspectrumbusiness.net%2Fbilling%2F/2/010101989f2c1f29ab5789bd14264800ae7d877ea7f61d24000000/LHnBIXX0VmCLVoXwNWtt23hGCdc=439/us02web.zoom.nl/j/81163775943?pwd=bLoo4JaWavsiTAuLWNoRsmbmALwjLB.1-angie

The emails themselves contained little to no message body content. While subject lines varied, they consistently impersonated routine business and workflow notifications, including payment and remittance alerts (for example, Automated Clearing House (ACH), Electronic Funds Transfer (EFT), wire), invoice or aging statements, and e‑signature or document delivery requests. These subjects relied on urgency, approval language, and transactional framing to prompt recipients to review, sign, or access an attached document.

Each message included an HTML attachment with a file name aligned to the email’s theme. When opened, the HTML file launched locally on the recipient’s device and immediately redirected the user to an initial external staging page. This page performed basic screening and then redirected the user to a secondary landing page hosting the phishing content. On the final landing page, users were presented with a CAPTCHA challenge before being directed to a fraudulent sign‑in page designed to harvest account credentials.

Interestingly, although messages in this campaign shared common tooling, structure, and delivery characteristics, the infrastructure hosting the final phishing payload was linked to multiple different PhaaS providers. Most observed phishing endpoints were associated with Tycoon2FA, while additional activity was linked to Kratos (formerly Sneaky2FA) and EvilTokens infrastructure.

Business email compromise

Microsoft defines business email compromise (BEC) as a text-based attack targeting enterprise users that impersonates a trusted entity for the purpose of persuading a recipient into initiating a fraudulent financial transaction or sending the threat actor sensitive documents. These attacks fluctuated across Q1, totaling approximately 10.7 million attacks: rising 24% in January, dipping 8% in February, then surging 26% in March.

The composition of BEC attacks remained consistent throughout Q1. Generic outreach messages (like “Are you at your desk?”) accounted for 82–84% of initial contact emails each month, while explicit requests for specific financial transactions or documents represented just 9–10%. This pattern underscores that BEC operators overwhelmingly favor establishing a conversational rapport before making fraudulent requests, rather than leading with direct financial asks.

Within the smaller subset of explicit financial requests, two sub-categories showed notable movement. Payroll update requests grew 15% in February, reaching their highest volume in eight months, potentially reflecting tax season-related social engineering. Gift card requests fell 37% in February to their lowest level since July before rebounding sharply in March (+108%), though they still represented less than 3% of overall BEC messages. These fluctuations suggest that BEC operators adjust their specific financial pretexts seasonally while maintaining a consistent overall approach.

Defending against email threats

Microsoft recommends the following mitigations to reduce the impact of this threat.

• Review the recommended settings for Exchange Online Protection and Microsoft Defender for Office 365 to ensure your organization has established essential defenses and knows how to monitor and respond to threat activity.
• Invest in user awareness training and phishing simulations. Attack simulation training in Microsoft Defender for Office 365, which also includes simulating phishing messages in Microsoft Teams, is one approach to running realistic attack scenarios in your organization.
• Enable Zero-hour auto purge (ZAP) in Defender for Office 365 to quarantine sent mail in response to newly acquired threat intelligence and retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.
• Responders could also manually check for and purge unwanted emails containing URLs and/or Subject fields that are similar, but not identical, to those of known bad messages. Investigate malicious email that was delivered in Microsoft 365 and use Threat Explorer to find and delete phishing emails.
• Turn on Safe Links and Safe Attachments in Microsoft Defender for Office 365.
• Enable network protection in Microsoft Defender for Endpoint.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Enable password-less authentication methods (for example, Windows Hello, FIDO keys, or Microsoft Authenticator) for accounts that support password-less. For accounts that still require passwords, use authenticator apps like Microsoft Authenticator for MFA. Refer to this article for the different authentication methods and features.
  • Conditional access policies can also be scoped to strengthen privileged accounts with phishing resistant MFA.
• Configure automatic attack disruption in Microsoft Defender XDR. Automatic attack disruption is designed to contain attacks in progress, limit the impact on an organization’s assets, and provide more time for security teams to remediate the attack fully.

Microsoft Defender detections

Microsoft Defender customers can refer to the list of applicable detections below. Microsoft Defender coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Microsoft Defender for Endpoint

The following alert might indicate threat activity associated with this threat. The alert, however, can be triggered by unrelated threat activity.

• Suspicious activity likely indicative of a connection to an adversary-in-the-middle (AiTM) phishing site

Microsoft Defender for Office 365

The following alerts might indicate threat activity associated with this threat. These alerts, however, can be triggered by unrelated threat activity.

• A potentially malicious URL click was detected
• A user clicked through to a potentially malicious URL
• Suspicious email sending patterns detected
• Email messages containing malicious URL removed after delivery
• Email messages removed after delivery
• Email reported by user as malware or phish

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently:

• Threat Intelligence Briefing agent
• Phishing Triage agent
• Threat Hunting agent
• Dynamic Threat Detection agent

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs.

Threat intelligence reports

Microsoft Defender XDR customers can use the following Threat Analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments.

Microsoft Defender XDR threat analytics

• Activity Profile: Email threat landscape, March 2026
• Activity Profile: Email threat landscape, February 2026
• Activity Profile: Email threat landscape, January 2026
• Tool Profile: Tycoon2FA
• Actor Profile: Storm-1747
• Technique Profile: QR code phishing
• Technique Profile: ClickFix technique leverages clipboard to run malicious commands
• Threat Overview Profile: Business Email Compromise
• Threat Overview Profile: Adversary-in-the-middle credential phishing

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

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The post Email threat landscape: Q1 2026 trends and insights appeared first on Microsoft Security Blog.

Microsoft Incident Response – Detection and Response Team (DART) researchers observed an emerging, financially motivated threat actor that Microsoft tracks as Storm-2755 conducting payroll pirate attacks targeting Canadian users. In this campaign, Storm-2755 compromised user accounts to gain unauthorized access to employee profiles and divert salary payments to attacker-controlled accounts, resulting in direct financial loss for affected individuals and organizations. 

While similar payroll pirate attacks have been observed in other malicious campaigns, Storm-2755’s campaign is distinct in both its delivery and targeting. Rather than focusing on a specific industry or organization, the actor relied exclusively on geographic targeting of Canadian users and used malvertising and search engine optimization (SEO) poisoning on industry agnostic search terms to identify victims. The campaign also leveraged adversary‑in‑the‑middle (AiTM) techniques to hijack authenticated sessions, allowing the threat actor to bypass multifactor authentication (MFA) and blend into legitimate user activity.

Microsoft has been actively engaged with affected organizations and taken multiple disruption efforts to help prevent further compromise, including tenant takedown. Microsoft continues to engage affected customers, providing visibility by sharing observed tactics, techniques, and procedures (TTPs) while supporting mitigation efforts.

In this blog, we present our analysis of Storm-2755’s recent campaign and the TTPs employed across each stage of the attack chain. To support proactive mitigations against this campaign and similar activity, we also provide comprehensive guidance for investigation and remediation, including recommendations such as implementing phishing-resistant MFA to help block these attacks and protect user accounts.

Storm-2755’s attack chain

Analysis of this activity reveals a financially motivated campaign built around session hijacking and abuse of legitimate enterprise workflows. Storm-2755 combined initial credential and token theft with session persistence and targeted discovery to identify payroll and human resources (HR) processes within affected Canadian organizations. By operating through authenticated user sessions and blending into normal business activity, the threat actor was able to minimize detection while pursuing direct financial gain.

The sections below examine each stage of the attack chain—from initial access through impact—detailing the techniques observed.

Initial access

In the observed campaign, Storm-2755 likely gained initial access through SEO poisoning or malvertising that positioned the actor-controlled domain, bluegraintours[.]com, at the top of search results for generic queries like “Office 365” or common misspellings like “Office 265”. Based on data received by DART, unsuspecting users who clicked these links were directed to a malicious Microsoft 365 sign-in page designed to mimic the legitimate experience, resulting in token and credential theft when users entered their credentials.

Once a user entered their credentials into the malicious page, sign-in logs reveal that the victim recorded a 50199 sign-in interrupt error immediately before Storm-2755 successfully compromised the account. When the session shifts from legitimate user activity to threat actor control, the user-agent for the session changes to Axios; typically, version 1.7.9, however the session ID will remain consistent, indicating that the token has been replayed.

This activity aligns with an AiTM attack—an evolution of traditional credential phishing techniques—in which threat actors insert malicious infrastructure between the victim and a legitimate authentication service. Rather than harvesting only usernames and passwords, AiTM frameworks proxy the entire authentication flow in real time, enabling the capture session cookies and OAuth access tokens issued upon successful authentication. Due to these tokens representing a fully authenticated session, threat actors can reuse them to gain access to Microsoft services without being prompted for credentials or MFA, effectively bypassing legacy MFA protections not designed to be phishing-resistant; phishing-resistant methods such as FIDO2/WebAuthN are designed to mitigate this risk.

While Axios is not a malicious tool, this attack path seems to take advantage of known vulnerabilities of the open-source software, namely CVE-2025-27152, which can lead to server-side request forgeries.

Persistence

Storm-2755 leveraged version 1.7.9 of the Axios HTTP client to relay authentication tokens to the customer infrastructure which effectively bypassed non-phishing resistant MFA and preserved access without requiring repeated sign ins. This replay flow allowed Storm-2755 to maintain these active sessions and proxy legitimate user actions, effectively executing an AiTM attack.

Microsoft consistently observed non-interactive sign ins to the OfficeHome application associated with the Axios user-agent occurring approximately every 30 minutes until remediation actions revoked active session tokens, which allowed Storm-2755 to maintain these active sessions and proxy legitimate user actions without detection.

After around 30 days, we observed that the stolen tokens would then become inactive when Storm-2755 did not continue maintaining persistence within the environment. The refresh token became unusable due to expiration, rotation, or policy enforcement, preventing the issuance of new access tokens after the session token had expired. The compromised sessions primarily featured non-interactive sign ins to OfficeHome and recorded sign ins to Microsoft Outlook, My Sign-Ins, and My Profile. For a more limited set of identities, password and MFA changes were observed to maintain more durable persistence within the environment after the token had expired.

Discovery

Once user accounts have been successfully comprised, discovery actions begin to identify internal processes and mailboxes associated with payroll and HR. Specific intranet searches during compromised sessions focused on keywords such as “payroll”, “HR”, “human”, “resources”, ”support”, “info”, “finance”, ”account”, and “admin” across several customer environments.

Email subject lines were also consistent across all compromised users; “Question about direct deposit”, with the goal of socially engineering HR or finance staff members into performing manual changes to payroll instructions on behalf of Storm-2755, removing the need for further hands-on-keyboard activity.

While similar recent campaigns have observed email content being tailored to the institution and incorporating elements to reference senior leadership contacts, Storm-2755’s attack seems to be focused on compromising employees in Canada more broadly. 

Where Storm-2755 was unable to successfully achieve changes to payroll information through user impersonation and social engineering of HR personnel, we observed a pivot to direct interaction and manual manipulation of HR software-as-a-service (SaaS) programs such as Workday. While the example below illustrates the attack flow as observed in Workday environments, it’s important to note that similar techniques could be leveraged against any payroll provider or SaaS platform.

Defense evasion

Following discovery activities, but prior to email impersonation, Storm-2755 created email inbox rules to move emails containing the keywords “direct deposit” or “bank” to the compromised user’s conversation history and prevent further rule processing. This rule ensured that the victim would not see the email correspondence from their HR team regarding the malicious request for bank account changes as this correspondence was immediately moved to a hidden folder.

This technique was highly effective in disguising the account compromise to the end user, allowing the threat actor to discreetly continue actions to redirect payments to an actor-controlled bank account undisturbed.

To further avoid potential detection by the account owner, Storm-2755 renewed the stolen session around 5:00 AM in the user’s time zone, operating outside normal business hours to reduce the chance of a legitimate reauthentication that would invalidate their access.

Impact

The compromise led to a direct financial loss for one user. In this case, Storm-2755 was able to gain access to the user’s account and created inbox rules to prevent emails that contained “direct deposit” or “bank”, effectively suppressing alerts from HR. Using the stolen session, the threat actor would email HR to request changes to direct deposit details, HR would then send back the instructions on how to change it. This led Storm-2755 to manually sign in to Workday as the victim to update banking information, resulting in a payroll check being redirected to an attacker-controlled bank account.

Defending against Storm-2755 and AiTM campaigns

Organizations should mitigate AiTM attacks by revoking compromised tokens and sessions immediately, removing malicious inbox rules, and resetting credentials and MFA methods for affected accounts.

To harden defenses, enforce device compliance enforcement through Conditional Access policies, implement phishing-resistant MFA, and block legacy authentication protocols. Organizations storing data in a security information and event management (SIEM) solution enable Defenders to quickly establish a clearer baseline of regular and irregular activity to distinguish compromised sessions from legitimate activity.

Enable Microsoft Defender to automatically disrupt attacks, revoke tokens in real time, monitor for anomalous user-agents like Axios, and audit OAuth applications to prevent persistence. Finally, run phishing simulation campaigns to improve user awareness and reduce susceptibility to credential theft.

To proactively protect against this attack pattern and similar patterns of compromise Microsoft recommends:

1. Implement phishing resistant MFA where possible: Traditional MFA methods such as SMS codes, email-based one-time passwords (OTPs), and push notifications are becoming less effective against today’s attackers. Sophisticated phishing campaigns have demonstrated that second factors can be intercepted or spoofed.
2. Use Conditional Access Policies to configure adaptive session lifetime policies: Session lifetime and persistence can be managed in several different ways based on organizational needs. These policies are designed to restrict extended session lifetime by prompting the user for reauthentication. This reauthentication might involve only one first factor, such as password, FIDO2 security keys, or passwordless Microsoft Authenticator, or it might require MFA.
3. Leverage continuous access evaluation (CAE): For supporting applications to ensure access tokens are re-evaluated in near real time when risk conditions change. CAE reduces the effectiveness of stolen access and fresh tokens by allowing access to be promptly revoked following user risk changes, credential resets, or policy enforcement events limiting attacker persistence.
   1. Consider Global Secure Access (GSA) as a complementary network control path: Microsoft’s Global Secure Access (Entra Internet Access + Entra Private Access) extends Zero Trust enforcement to the network layer, providing an identity-aware secure network edge that strengthens CAE signal fidelity, enables Compliant Network Conditional Access conditions, and ensures consistent policy enforcement across identity, device, and network—forming a complete third managed path alongside identity and device controls.
4. Create alerting of suspicious inbox-rule creation: This alerting is essential to quickly identify and triage evidence of business email compromise (BEC) and phishing campaigns. This playbook helps defenders investigate any incident related to suspicious inbox manipulation rules configured by threat actors and take recommended actions to remediate the attack and protect networks.
5. Secure organizational resources through Microsoft Intune compliance policies: When integrated with Microsoft Entra Conditional Access policies, Intune offers an added layer of protection based on a devices current compliance status to help ensure that only devices that are compliant are permitted to access corporate resources.

Microsoft Defender detection and hunting guidance

Microsoft Defender customers can refer to the list of applicable detections below. Microsoft Defender XDR coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.  

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently: 

• Threat Intelligence Briefing agent 
• Phishing Triage agent 
• Threat Hunting agent 
• Dynamic Threat Detection agent 

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs. 

Threat intelligence reports

Microsoft Defender XDR customers can use the following threat analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide the intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments. 

Microsoft Defender XDR threat analytics

• Activity Profile: Storm-2755 “payroll pirate attacks” targeting Canadian employees
• Activity Profile: Targeted “payroll pirate” attacks affecting US universities
• Actor Profile: Storm-2657

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Hunting queries

Microsoft Defender XDR

Microsoft Defender XDR customers can run the following queries to find related activity in their networks:

Review inbox rules created to hide or delete incoming emails from Workday

Results of the following query may indicate an attacker is trying to delete evidence of Workday activity.

CloudAppEvents 
| where Timestamp >= ago(1d)
| where Application == "Microsoft Exchange Online" and ActionType in ("New-InboxRule", "Set-InboxRule")  
| extend Parameters = RawEventData.Parameters // extract inbox rule parameters
| where Parameters has "From" and Parameters has "@myworkday.com" // filter for inbox rule with From field and @MyWorkday.com in the parameters
| where Parameters has "DeleteMessage" or Parameters has ("MoveToFolder") // email deletion or move to folder (hiding)
| mv-apply Parameters on (where Parameters.Name == "From"
| extend RuleFrom = tostring(Parameters.Value))
| mv-apply Parameters on (where Parameters.Name == "Name" 
| extend RuleName = tostring(Parameters.Value))

Review updates to payment election or bank account information in Workday

The following query surfaces changes to payment accounts in Workday.

CloudAppEvents 
| where Timestamp >= ago(1d)
| where Application == "Workday"
| where ActionType == "Change My Account" or ActionType == "Manage Payment Elections"
| extend Descriptor = tostring(RawEventData.target.descriptor)

Microsoft Sentinel

Microsoft Sentinel customers can use the TI Mapping analytics (a series of analytics all prefixed with ‘TI map’) to automatically match the malicious domain indicators mentioned in this blog post with data in their workspace. If the TI Map analytics are not currently deployed, customers can install the Threat Intelligence solution from the Microsoft Sentinel Content Hub to have the analytics rule deployed in their Sentinel workspace.

Malicious inbox rule

The query includes filters specific to inbox rule creation, operations for messages with DeleteMessage, and suspicious keywords.

let Keywords = dynamic(["direct deposit", “hr”, “bank”]);
OfficeActivity
| where OfficeWorkload =~ "Exchange" 
| where Operation =~ "New-InboxRule" and (ResultStatus =~ "True" or ResultStatus =~ "Succeeded")
| where Parameters has "Deleted Items" or Parameters has "Junk Email"  or Parameters has "DeleteMessage"
| extend Events=todynamic(Parameters)
| parse Events  with * "SubjectContainsWords" SubjectContainsWords '}'*
| parse Events  with * "BodyContainsWords" BodyContainsWords '}'*
| parse Events  with * "SubjectOrBodyContainsWords" SubjectOrBodyContainsWords '}'*
| where SubjectContainsWords has_any (Keywords)
 or BodyContainsWords has_any (Keywords)
 or SubjectOrBodyContainsWords has_any (Keywords)
| extend ClientIPAddress = case( ClientIP has ".", tostring(split(ClientIP,":")[0]), ClientIP has "[", tostring(trim_start(@'[[]',tostring(split(ClientIP,"]")[0]))), ClientIP )
| extend Keyword = iff(isnotempty(SubjectContainsWords), SubjectContainsWords, (iff(isnotempty(BodyContainsWords),BodyContainsWords,SubjectOrBodyContainsWords )))
| extend RuleDetail = case(OfficeObjectId contains '/' , tostring(split(OfficeObjectId, '/')[-1]) , tostring(split(OfficeObjectId, '\\')[-1]))
| summarize count(), StartTimeUtc = min(TimeGenerated), EndTimeUtc = max(TimeGenerated) by  Operation, UserId, ClientIPAddress, ResultStatus, Keyword, OriginatingServer, OfficeObjectId, RuleDetail
| extend AccountName = tostring(split(UserId, "@")[0]), AccountUPNSuffix = tostring(split(UserId, "@")[1])
| extend OriginatingServerName = tostring(split(OriginatingServer, " ")[0])

Detect network IP and domain indicators of compromise using ASIM

The following query checks IP addresses and domain IOCs across data sources supported by ASIM network session parser.

//IP list and domain list- _Im_NetworkSession
let lookback = 30d;
let ioc_domains = dynamic(["http://bluegraintours.com"]);
_Im_NetworkSession(starttime=todatetime(ago(lookback)), endtime=now())
| where DstDomain has_any (ioc_domains)
| summarize imNWS_mintime=min(TimeGenerated), imNWS_maxtime=max(TimeGenerated),
  EventCount=count() by SrcIpAddr, DstIpAddr, DstDomain, Dvc, EventProduct, EventVendor

Detect domain and URL indicators of compromise using ASIM

The following query checks domain and URL IOCs across data sources supported by ASIM web session parser.

// file hash list - imFileEvent
// Domain list - _Im_WebSession
let ioc_domains = dynamic(["http://bluegraintours.com"]);
_Im_WebSession (url_has_any = ioc_domains)

Indicators of compromise

In observed compromises associated with hxxp://bluegraintours[.]com, sign-in logs consistently showed a distinctive authentication pattern. This pattern included multiple failed sign‑in attempts with various causes followed by a failure citing Microsoft Entra error code 50199, immediately preceding a successful authentication. Upon successful sign in, the user-agent shifted to Axios, while the session ID remained unchanged—an indication that an authenticated session token had been replayed rather than a new session established. This combination of error sequencing, user‑agent transition, and session continuity is characteristic of AiTM activity and should be evaluated together when assessing potential compromise tied to this domain

Acknowledgments

• https://pushsecurity.com/blog/phishing-with-active-directory-federation-services/ – Push Security offers a deep technical analysis of an Active Directory Federation Services (ADFS)‑enabled phishing attack, demonstrating how the bluegraintours[.]com ADFS deployment was exploited to intercept authentication tokens.

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky.

To hear stories and insights from the Microsoft Threat Intelligence community about the ever-evolving threat landscape, listen to the Microsoft Threat Intelligence podcast.

The post Investigating Storm-2755: “Payroll pirate” attacks targeting Canadian employees appeared first on Microsoft Security Blog.

Executive summary

Forest Blizzard, a threat actor linked to the Russian military, has been compromising insecure home and small-office internet equipment like routers, then modifying their settings in ways that turn them into part of the actor’s malicious infrastructure. The threat actor then hides behind this legitimate but compromised infrastructure to spy on additional targets or conduct follow-on attacks. Microsoft Threat Intelligence is sharing information on this campaign to increase awareness of the risks associated with insecure home and small-office internet routing devices and give users and organizations tools to mitigate, detect, and hunt for these threats where they might be impacted. 

Since at least August 2025, the Russian military intelligence actor Forest Blizzard, and its sub-group tracked as Storm-2754, has conducted a large-scale exploitation of vulnerable small office/home office (SOHO) devices to hijack Domain Name System (DNS) requests and facilitate the collection of network traffic. For nation-state actors like Forest Blizzard, DNS hijacking enables persistent, passive visibility and reconnaissance at scale.

By compromising edge devices that are upstream of larger targets, threat actors can take advantage of less closely monitored or managed assets to pivot into enterprise environments. Microsoft Threat Intelligence has identified over 200 organizations and 5,000 consumer devices impacted by Forest Blizzard’s malicious DNS infrastructure; telemetry did not indicate compromise of Microsoft-owned assets or services.

Forest Blizzard, which primarily collects intelligence in support of Russian government foreign policy initiatives, has also leveraged its DNS hijacking activity to support post-compromise adversary-in-the-middle (AiTM) attacks on Transport Layer Security (TLS) connections against Microsoft Outlook on the web domains. This activity enables the interception of cloud-hosted content, impacting numerous sectors including government, information technology (IT), telecommunications, and energy—all usual targets for this actor.

While the number of organizations specifically targeted for TLS AiTM is only a subset of the networks with vulnerable SOHO devices, Microsoft Threat Intelligence assesses that the threat actor’s broad access could enable larger-scale AiTM attacks, which might include active traffic interception. Targeting SOHO devices is not a new tactic, technique, or procedure (TTP) for Russian military intelligence actors, but this is the first time Microsoft has observed Forest Blizzard using DNS hijacking at scale to support AiTM of TLS connections after exploiting edge devices.

In this blog, we share our analysis of the TTPs used by Forest Blizzard in this campaign to illustrate how threat actors leverage this attack surface. We’re also outlining mitigation and protection recommendations to reduce exposure from compromised SOHO devices, as well as Microsoft Defender detection and hunting guidance to help defenders identify and investigate related malicious activity. It’s important for organizations to account for unmanaged SOHO devices—particularly those used by remote and hybrid employees—since compromised home and small‑office network infrastructure can expose cloud access and sensitive data even when enterprise environments and cloud services themselves remain secure.

DNS hijacking attack chain: From compromised devices to AiTM and other follow-on activity

The following sections provide details on Forest Blizzard’s end-to-end attack chain for this campaign, from initial access on vulnerable SOHO routers to actor-controlled DNS resolution and AiTM activity.

Edge router compromise

Forest Blizzard gained access to SOHO devices then altered their default network configurations to use actor-controlled DNS resolvers. This malicious re-configuration resulted in thousands of devices sending their DNS requests to actor-controlled servers.

Typically, endpoint devices obtain network configuration settings from edge devices through Dynamic Host Configuration Protocol (DHCP). Exploiting SOHO devices requires minimal investment while providing wide visibility on compromised devices, allowing the actor to collect DNS traffic and passively observe DNS requests, which could facilitate follow-on collection activity as described in the next section.

DNS hijacking

Forest Blizzard is almost certainly using the dnsmasq utility to perform DNS resolution and provide responses while listening on port 53 for DNS queries. The dnsmasq utility is a legitimate tool that provides lightweight network services widely used in home routers or smaller networks. Among its services are DNS forwarding and caching and a DHCP server, which collectively enable upstream DNS query forwarding and IP address assignment on a local network.

Adversary-in-the-middle attacks

Microsoft Threat Intelligence has observed AiTM attacks related to the initial access campaign. Although they target different endpoints, both are Transport Layer Security (TLS) AiTM attacks, allowing the threat actor to collect data being transmitted.

In most cases, the DNS requests appear to have been transparently proxied by the actor’s infrastructure, resulting in connections to the legitimate service endpoints without interruption. However, in a limited number of compromises, the threat actor spoofed DNS responses for specifically targeted domains to force impacted endpoints to connect to infrastructure controlled by the threat actor.

The actor-controlled malicious infrastructure would then present an invalid TLS certificate to the victim, spoofing the legitimate Microsoft service. If the compromised user ignored warnings about the invalid TLS certificate, the threat actor could then actively intercept the underlying plaintext traffic—potentially including emails and other customer content— within the TLS connection. Since Forest Blizzard does not always conduct AiTM activity after achieving initial access through DNS hijacking, the actor is likely using it selectively against targets of intelligence priority post-compromise:

• AiTM attack against Microsoft 365 domains: Microsoft observed Forest Blizzard conducting follow-on AiTM operations against a subset of domains associated with Microsoft Outlook on the web.
• AiTM attack against specific government servers: Microsoft identified separate AiTM activity targeting non-Microsoft hosted servers in at least three government organizations in Africa, during which Forest Blizzard intercepted DNS requests and conducted follow-on collection.

Possible post-compromise activities

Forest Blizzard’s DNS hijacking and AiTM activity allows the actor to conduct DNS collection on sensitive organizations worldwide and is consistent with the actor’s longstanding remit to collect espionage against priority intelligence targets. Although we have only observed Forest Blizzard utilizing their DNS hijacking campaign for information collection, an attacker could use an AiTM position for additional outcomes, such as malware deployment or denial of service.

Mitigation and protection guidance

Microsoft recommends the following mitigation steps to protect against this Forest Blizzard activity:

Protection against DNS hijacking

• Enforce domain-name-based network access controls using Zero Trust DNS (ZTDNS) on Windows endpoints to ensure that devices only resolve DNS through trusted servers.
• Block known or malicious domains to prevent DNS-based attacks, and maintain detailed DNS logs to monitor, investigate, and gain insight into anomalous DNS traffic.
• Follow best practices for enhancing network security for cloud computing environments.
• Enable network protection and web protection in Microsoft Defender for Endpoint to safeguard against malicious sites and internet-based threats.
• Avoid using home router solutions in corporate environments.

Protection against AiTM and credential theft

• Centralize your organization’s identity management into a single platform. If your organization is a hybrid environment, integrate your on-premises directories with your cloud directories. If your organization is using a third-party for identity management, ensure this data is being logged in a SIEM or connected to Microsoft Entra to fully monitor for malicious identity access from a centralized location.
  • The added benefits to centralizing all identity data is to facilitate implementation of Single Sign On (SSO) and provide users with a more seamless authentication process, as well as configure Microsoft Entra’s machine learning models to operate on all identity data, thus learning the difference between legitimate access and malicious access quicker and easier.
  • It is recommended to synchronize all user accounts except administrative and high privileged ones when doing this to maintain a boundary between the on-premises environment and the cloud environment, in case of a breach. 
• Strictly enforce multifactor authentication (MFA) and apply Conditional Access policies, particularly for privileged and high‑risk accounts, to reduce the impact of credential compromise. Use passwordless solutions like passkeys in addition to implementing MFA.
  • Use the Microsoft Authenticator app for passkeys and MFA, and complement MFA with Conditional Access policies, where sign-in requests are evaluated using additional identity-driven signals.
  • Conditional Access policies can also be scoped to strengthen privileged accounts with phishing resistant MFA.
  • Your passkey and MFA policy can be further secured by only allowing MFA and passkey registrations from trusted locations and devices.
• Implement continuous access evaluation and implement a sign-in risk policy to automate response to risky sign-ins. A sign-in risk represents the probability that a given authentication request isn’t authorized by the identity owner. A sign-in risk-based policy can be implemented by adding a sign-in risk condition to Conditional Access policies that evaluates the risk level of a specific user or group. Based on the risk level (high/medium/low), a policy can be configured to block access or force multi-factor authentication. We recommend requiring multi-factor authentication on Medium or above risky sign-ins. 
• Follow best practices for recovering from systemic identity compromises outlined by Microsoft Incident Response.

Microsoft Defender detection and hunting guidance

Microsoft Defender customers can refer to the following list of applicable detections. Microsoft Defender coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Microsoft Defender for Endpoint

The following alerts might indicate threat activity associated with this threat. These alerts, however, can be triggered by unrelated threat activity and are not monitored in the status cards provided with this report. Microsoft tracks the specific component of Forest Blizzard associated with this activity as Storm-2754.

• Forest Blizzard Actor activity detected
• Storm-2754 activity

Entra ID Protection

The following Microsoft Entra ID Protection risk detection informs Entra ID user risk events and can indicate associated threat activity, including unusual user activity consistent with known Forest Blizzard attack patterns identified by Microsoft Threat Intelligence research: 

• Microsoft Entra threat intelligence (sign-in) (RiskEventType: investigationsThreatIntelligence)

Hunting

Because initial compromise and DNS modification occur at the router-level, the following hunting recommendations focus on detecting post-compromise behavior.

Modifications to DNS settings

In identified activity, Forest Blizzard’s compromise of an infected SOHO device resulted in the update of the default DNS setting on connected Windows machines.

• Identifying unusual modifications to DNS settings can be an identifier for malicious DNS hijacking activity.
• Resetting the DNS settings and addressing vulnerable SOHO devices can resolve this activity, though these actions will not remediate an attacker who has managed to steal user credentials in follow-on AiTM activity.

Post-compromise activity

Forest Blizzard’s post-compromise AiTM activity could enable the actor to operate in the environment as a valid user. Establishing a baseline of normal user activity is important to be able to identify and investigate potentially anomalous actions. For Entra environments, Microsoft Entra ID Protection provides two important reports for daily activity monitoring:

• Risky sign-in reports surfaces attempted and successful user access activities where the legitimate owner might not have performed the sign-in.
• Risky user reports surfaces user accounts that might have been compromised, such as a leaked credential that was detected or the user signing in from an unexpected location in the absence of planned travel.

Defenders can surface highly suspicious or successful risky sign-ins using the following advanced hunting query in the Microsoft Defender XDR portal:

AADSignInEventsBeta 
| where RiskLevelAggregated == 100 and (ErrorCode == 0 or ErrorCode == 50140) 
| project Timestamp, Application, LogonType, AccountDisplayName, UserAgent, IPAddress 

After stealing credentials, Forest Blizzard could potentially carry out a range of activity against targets as a legitimate user. For Microsoft 365 environments, the ActionType “Search” or “MailItemsAccessed” in the CloudAppEvents table in the Defender XDR portal can provide some information on user search activities, including the Microsoft Defender for Cloud Apps connector that surfaces activity unusual for that user.

CloudAppEvents
| where AccountObjectId == " " // limit results to specific suspicious user accounts by adding the user here
| where ActionType has_any ("Search", "MailItemsAccessed")

Threat intelligence reports

Microsoft Defender XDR customers can use the following threat analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide the intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments:

• Actor profile: Forest Blizzard
• Activity profile: SOHO router compromise leads to DNS hijacking and adversary-in-the-middle attacks

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently:

• Threat Intelligence Briefing agent
• Phishing Triage agent
• Threat Hunting agent
• Dynamic Threat Detection agent

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs.

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky.

To hear stories and insights from the Microsoft Threat Intelligence community about the ever-evolving threat landscape, listen to the Microsoft Threat Intelligence podcast.

The post SOHO router compromise leads to DNS hijacking and adversary-in-the-middle attacks appeared first on Microsoft Security Blog.

During tax season, threat actors reliably take advantage of the urgency and familiarity of time-sensitive emails, including refund notices, payroll forms, filing reminders, and requests from tax professionals, to trick targets into opening malicious attachments, scanning QR codes, or following multi-step link chains. Every year, there is an observable uptick in tax-themed campaigns as Tax Day (April 15) approaches in the United States, and this year is no different.

In recent months, Microsoft Threat Intelligence identified email campaigns using lures around W-2, tax forms, or similar themes, or posing as government tax agencies, tax services firms, and relevant financial institutions. Many campaigns target individuals for personal and financial data theft, but others specifically target accountants and other professionals who handle sensitive documents, have access to financial data, and are accustomed to receiving tax-related emails during this period.

Identified campaigns were designed to harvest credentials or deliver malware. Phishing-as-a-service (PhaaS) platforms continue to be prevalent, enabling highly convincing credential theft and multifactor authentication (MFA) bypass campaigns through tailored tax-themed social engineering lures, attachments, and phishing pages. In cases of malware delivery, we noted a continued trend of abusing legitimate remote monitoring and management tools (RMMs), which allow threat actors to maintain persistence on a compromised device or network, enable an alternative command-and-control method, or, in the case of hands-on-keyboard attacks, use as an interactive remote desktop session.

This blog details several of the campaigns observed by Microsoft Threat Intelligence in the past few months that leveraged the tax season for social engineering. By educating users about phishing lures, configuring essential email security settings, and defending against credential theft, individuals and organizations can defend against both this seasonal surge in phishing attacks and more broadly against many types of phishing attacks that we observe.

A wide range of tax-themed campaigns

CPA lures leading to Energy365 phishing kit

In early February 2026, we observed a campaign that was delivering the Energy365 PhaaS phishing kit and used tax and Certified Public Accountant (CPA) lures throughout the attack chain. This campaign stood out due to its highly specific lure customization, in contrast to other threat actors who use this popular phishing kit but employ generic lures. Other notable characteristics of this campaign include the involvement of multiple file formats such as Excel and OneNote, use of legitimate infrastructure such as OneDrive, and multiple rounds of user interaction, all attempts to complicate automated and reputation-based detection. While this specific campaign was not large, it represents the capabilities of Energy365, one of the leading phishing kits that enables hundreds of thousands of malicious emails observed by Microsoft daily.

Between February 5 and 6, several hundred emails with the subject ”See Tax file” targeted multiple industries including financial services, education, information technology (IT), insurance, and healthcare, primarily in the United States. The Excel attachment had the file name [Accountant’s name] CPA.xlsx, using the name of a real accountant (likely impersonated in this campaign without their knowledge). The attachment contained a clickable “REVIEW DOCUMENTS” button that linked to a OneNote file hosted on OneDrive.

The OneNote file, which continued the ruse by using the same CPA’s name and logo, contained a link leading to a malicious landing page that hosted the Energy365 phishing kit and attempted to harvest credentials such as email and password.

QR code and W2 lure leading to SneakyLog phishing kit

On February 10, 2026, Microsoft Threat Intelligence observed tax-themed phishing emails sent to approximately 100 organizations, in the manufacturing, retail, and healthcare industries primarily in the United States. The emails used the subject “2025 Employee Tax Docs” and contained an attachment named 2025_Employee_W-2  .docx. The attachment had content that mentioned various tax-related terms like Form W-2 and had a QR code pointing to a phishing page.

Each document was customized to contain the recipient’s name, and the URL hidden behind the QR code also contained the recipient’s email address. This means that each recipient received a unique attachment. The phishing page was built with the SneakyLog PhaaS platform and mimicked the Microsoft 365 sign-in page to steal credentials. SneakyLog, which is also known as Kratos, has been around since at least the beginning of 2025. This phishing kit is sold as a part of phishing-as-a-service and is capable of harvesting credentials and 2FA. While not as popular as other platforms like Energy365, SneakyLog has been consistently present in the threat landscape.

Form 1099-themed phishing delivering ScreenConnect

In January and February 2026, Microsoft Threat Intelligence observed sets of tax-themed domains registered, likely to be used in tax-themed phishing campaigns. These domains used keywords such as “tax” and “1099form” and also impersonated specific legitimate companies involved in tax filing, accounting, investing sectors. Brand abuse of legitimate accounting, tax preparation, finance, bookkeeping, and related companies continues to proliferate during tax season.

We observed one of these domains being used in a campaign between February 8 and February 10. Several hundred emails were sent to recipients in a wide range of industries primarily in the United States. The emails used subject lines like “Your Account Now Includes Updated Tax Forms [RF] 1234” or “Your Form 1099-R is ready – [RF] 12123123”. The email body said “2025 Tax Forms is ready” and contained a clickable “View Tax Forms” button that linked to the URL taxationstatments2025[.]com. If clicked, this domain redirected to tax-statments2025[.]com, which in turn served a malware executable named 1099-FR2025.exe.

The payload delivered in this campaign is the remote management and monitoring (RMM) tool ScreenConnect, signed by ConnectWise. The specific code signing certificate has since been revoked by the issuer due to high abuse. ScreenConnect is a legitimate tool, but threat actors have learned to abuse RMM functionality and essentially turn legitimate tools into remote access trojans (RATs), helping them take control of compromised devices.

IRS and cryptocurrency-themed phishing delivering SimpleHelp

Another notable campaign combined the impersonation of the US Internal Revenue Service (IRS) with a cryptocurrency lure. Notably, this campaign attempted to evade detection by not including a clickable link, but instead asked recipients to copy and paste a URL, which was in the email body, into the browser.

This campaign was sent on February 23 and 27, and it consisted of several thousands of emails sent to recipients exclusively in the United States. The emails targeted many industries, with the bulk of email sent to higher education. The emails used the subject “IR-2026-216” and abused online platform Eventbrite to masquerade as coming from the IRS:

• “IRS US”<noreply@campaign[.]eventbrite[.]com>
• “IRS GOV”<noreply@campaign[.]eventbrite[.]com>
• “Service”<noreply@campaign[.]eventbrite[.]com>
• “IRS TAX”<noreply@campaign[.]eventbrite[.]com>
• “.IRS.GOV”<noreply@campaign[.]eventbrite[.]com>

The email body said “Cryptocurrency Tax Form 1099 is Ready” and contained a non-clickable URL with the domain irs-doc[.]com or gov-irs216[.]net. If pasted in the browser, the URL led to the download of IRS-doc.msi, which was either the RMM tool ScreenConnect or SimpleHelp, depending on the day of the campaign. SimpleHelp is another legitimate remote monitoring and management tool abused by threat actors. While not as popular as ScreenConnect, threat actors have been increasingly adopting SimpleHelp due to the recent crackdown on abuse of ScreenConnect by ConnectWise.

Campaign targeting CPAs and delivering Datto

Like in previous tax seasons, Microsoft Threat Intelligence observed email campaigns specifically targeting accountants and related organizations. A variant of this campaign is a well-known and documented technique that uses benign conversation starters. The threat actor reaches out asking for assistance in filing taxes, asking for a quote, and typically providing a backstory. If the actor receives a reply, they send a malicious link that leads to the installation of various RATs. However, Microsoft Threat Intelligence also observed campaigns targeting CPAs that contain a similar backstory but include the malicious link in the first email.

One such campaign was sent on March 9 and consisted of approximately 1,000 emails sent to users exclusively in the United States. The emails targeted multiple accounting companies but also included a few related industries such as financial services, legal, and insurance. The emails used the subject “REQUEST FOR PROFESSIONAL TAX FILLING”.

The email provided a backstory that included a description of a complex tax return situation involving tax audit, university tuition, loan interest, and real estate income. The sender also attempted to explain their inability to physically visit the office due to travel. Finally, the sender asked for a price quote. We observed variations of the backstory on different days, including switching CPAs due to fee increases.

The link in email used the free site hosting service carrd[.]co. The site contained a simple “VIEW DOCUMENTS” button that linked to a URL shortener service, which redirected users to private-adobe-client[.]im. This uncomplicated redirection chain served to hinder automated detection by using legitimate sites with good reputation and involving user interaction. The final landing page served an executable related to the Datto. Datto is yet another legitimate remote monitoring and management tool, abused by threat actors.

IRS-themed campaign targeting accounting professionals and dropping ScreenConnect

On February 10, 2026, Microsoft Threat Intelligence observed a large-scale phishing campaign sent to more than 29,000 users across 10,000 organizations, almost exclusively focused on targets in the United States (95% of targets). The campaign did not concentrate on any single sector but instead included a wide set of industries, with financial services (19%), technology and software (18%), and retail and consumer goods (15%) being the most commonly targeted.

While the campaign did not seem to have been targeting a specific industry, an analysis of intended recipients indicated that the campaign was targeting specific roles, particularly accountants and tax preparers. Messages in the campaign were sent in two waves over a nine‑hour window between 10:35 UTC and 19:51 UTC.  

The emails impersonated the IRS, claiming that potentially irregular tax returns had been filed under the recipient’s Electronic Filing Identification Number (EFIN). Recipients were instructed to review these returns by downloading a purportedly legitimate “IRS Transcript Viewer.”

The emails were sent through Amazon Simple Email Service (SES) from one of two sender addresses on edud[.]site, a domain registered in August 2025. To enhance credibility, the sender display name rotated among the following 14 IRS‑themed identities:

• IRS e-File Services
• IRS EFIN Team
• IRS EFIN Compliance
• IRS e-Services
• IRS E-File Operations
• IRS Filing Review
• IRS Filing Support
• IRS EFIN Support
• IRS e-Services Team
• IRS e-File Support
• IRS EFIN Review
• IRS e-File Compliance
• IRS e-Services Support
• IRS Practitioner e-Services

Similarly, the subject lines used in the campaign also rotated, presumably to try and circumvent detection systems that rely on static text signatures. The most common among the 49 email subjects we observed in this campaign include:

• IRS Request Transcript Review
• IRS Notice Firm Return Review
• CPA Compliance Review
• IRS Support Firm Filing Review
• Review Requested Compliance

The emails contained a “Download IRS Transcript View 5.1” button, which purported to lead to a legitimate IRS application that could be used to review the transcript referenced in the email. Instead, the link pointed to an Amazon SES click‑tracking URL (awstrack[.]me), which then redirected to smartvault[.]im, a malicious look‑alike domain mimicking SmartVault, a well‑known tax and document‑management service used by accounting professionals. To evade automated analysis, the phishing site used Cloudflare for bot detection and blocking. Only visitors who resembled human users would be able to reach the final phishing payload, while traffic from crawlers and sandboxes would result in a block page.

Users who passed the bot check would be shown a fake “verification” animation that indicated the IRS website was conducting an automated check to verify the connection with IRS provider services. After this animation, a user would be shown a page indicating that the supposed transcript viewer application would start downloading automatically before being redirected to the legitimate IRS provider services webpage. The downloaded file, named TranscriptViewer5.1.exe, was not a legitimate IRS tool but a maliciously repackaged ScreenConnect remote access tool (RAT). Upon execution, this payload could grant attackers remote control of the victim system, enabling data theft, credential harvesting, and further post‑exploitation activity.

How to protect users and organization against tax-themed campaigns

To defend against social engineering campaigns that leverage the surge in email activity during Tax Season, Microsoft recommends the following mitigation measures:

• Configure automatic attack disruption in Microsoft Defender XDR. Automatic attack disruption is designed to contain attacks in progress, limit the impact on an organization’s assets, and provide more time for security teams to remediate the attack fully.
• Enforce multifactor authentication (MFA) on all accounts, remove users excluded from MFA, and strictly require MFA from all devices in all locations at all times.
• Use the Microsoft Authenticator app for passkeys and MFA, and complement MFA with conditional access policies, where sign-in requests are evaluated using additional identity-driven signals.
• Conditional access policies can also be scoped to strengthen privileged accounts with phishing resistant MFA.
• Enable Zero-hour auto purge (ZAP) in Office 365 to quarantine sent mail in response to newly acquired threat intelligence and retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.
• Configure Microsoft Defender for Office 365 Safe Links to recheck links on click. Safe Links provides URL scanning and rewriting of inbound email messages in mail flow and time-of-click verification of URLs and links in email messages, other Microsoft Office applications such as Teams, and other locations such as SharePoint Online. Safe Links scanning occurs in addition to the regular anti-spam and anti-malware protection in inbound email messages in Microsoft Exchange Online Protection (EOP). Safe Links scanning can help protect your organization from malicious links that are used in phishing and other attacks.
• Invest in advanced anti-phishing solutions that monitor and scan incoming emails and visited websites. For example, organizations can leverage web browsers like Microsoft Edge that automatically identify and block malicious websites, including those used in this phishing campaign, and solutions that detect and block malicious emails, links, and files.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Enable network protection to prevent applications or users from accessing malicious domains and other malicious content on the internet.

Microsoft Defender detection and hunting guidance

Microsoft Defender customers can refer to the list of applicable detections below. Microsoft Defender XDR coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently:

• Threat Intelligence Briefing agent
• Phishing Triage agent
• Threat Hunting agent
• Dynamic Threat Detection agent

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs.

Threat intelligence reports

Microsoft Defender XDR customers can use the following threat analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide the intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments:

• Threat Overview Profile: On-premises credential theft
• Technique Profile: Abuse of remote monitoring and management tools

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Hunting queries

Microsoft Defender XDR

Microsoft Defender XDR customers can run the following advanced hunting queries to find related activity in their networks:

Find email messages related to known domains

The following query checks domains in Defender XDR email data:

EmailUrlInfo  
| where UrlDomain has_any ("taxationstatments2025.com", "irs-doc.com", "gov-irs216.net", "private-adobe-client.im", "edud.site", "smartvault.im")

Detect file hash indicators in email data

The following query checks hashes related to identified phishing activity in Defender XDR data:

let File_Hashes_SHA256 = dynamic([
"45b6b4db1be6698c29ffde9daeb8ffaa344b687d3badded2f8c68c922cdce6e0", "d422f6f5310af1e72f6113a2a592916f58e3871c58d0e46f058d4b669a3a0fd8"]);
DeviceFileEvents
| where SHA256 has_any (File_Hashes_SHA256)

Microsoft Sentinel

Microsoft Sentinel customers can use the TI Mapping analytics (a series of analytics all prefixed with ‘TI map’) to automatically match the indicators mentioned in this blog post with data in their workspace. If the TI Map analytics are not currently deployed, customers can install the Threat Intelligence solution from the Microsoft Sentinel Content Hub to have the analytics rule deployed in their Sentinel workspace.

The following queries use Sentinel Advanced Security Information Model (ASIM) functions to hunt threats across both Microsoft first-party and third-party data sources. ASIM also supports deploying parsers to specific workspaces from GitHub, using an ARM template or manually.

Detect network IP and domain indicators of compromise using ASIM

The following query checks IP addresses and domain IOCs across data sources supported by ASIM network session parser:

//IP list and domain list- _Im_NetworkSession
let lookback = 30d;
let ioc_ip_addr = dynamic([]);
let ioc_domains = dynamic(["taxationstatments2025.com", "irs-doc.com", "gov-irs216.net", "private-adobe-client.im"]);
_Im_NetworkSession(starttime=todatetime(ago(lookback)), endtime=now())
| where DstIpAddr in (ioc_ip_addr) or DstDomain has_any (ioc_domains)
| summarize imNWS_mintime=min(TimeGenerated), imNWS_maxtime=max(TimeGenerated),
  EventCount=count() by SrcIpAddr, DstIpAddr, DstDomain, Dvc, EventProduct, EventVendor

Detect Web Sessions IP and file hash indicators of compromise using ASIM

The following query checks IP addresses, domains, and file hash IOCs across data sources supported by ASIM web session parser:

//IP list - _Im_WebSession
let lookback = 30d;
let ioc_ip_addr = dynamic([]);
let ioc_sha_hashes =dynamic(["45b6b4db1be6698c29ffde9daeb8ffaa344b687d3badded2f8c68c922cdce6e0"]);
_Im_WebSession(starttime=todatetime(ago(lookback)), endtime=now())
| where DstIpAddr in (ioc_ip_addr) or FileSHA256 in (ioc_sha_hashes)
| summarize imWS_mintime=min(TimeGenerated), imWS_maxtime=max(TimeGenerated),
  EventCount=count() by SrcIpAddr, DstIpAddr, Url, Dvc, EventProduct, EventVendor

Detect domain and URL indicators of compromise using ASIM

The following query checks domain and URL IOCs across data sources supported by ASIM web session parser:

// file hash list - imFileEvent
// Domain list - _Im_WebSession
let ioc_domains = dynamic(["taxationstatments2025.com", "irs-doc.com", "gov-irs216.net", "private-adobe-client.im"]);
_Im_WebSession (url_has_any = ioc_domains)

Detect files hashes indicators of compromise using ASIM

The following query checks IP addresses and file hash IOCs across data sources supported by ASIM file event parser:

// file hash list - imFileEvent
let ioc_sha_hashes = dynamic(["45b6b4db1be6698c29ffde9daeb8ffaa344b687d3badded2f8c68c922cdce6e0"]);
imFileEvent
| where SrcFileSHA256 in (ioc_sha_hashes) or
TargetFileSHA256 in (ioc_sha_hashes)
| extend AccountName = tostring(split(User, @'')[1]), 
  AccountNTDomain = tostring(split(User, @'')[0])
| extend AlgorithmType = "SHA256"

Indicators of compromise

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky.

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The post When tax season becomes cyberattack season: Phishing and malware campaigns using tax-related lures appeared first on Microsoft Security Blog.

Following its emergence in August 2023, Tycoon2FA rapidly became one of the most widespread phishing-as-a-service (PhaaS) platforms, enabling campaigns responsible for tens of millions of phishing messages reaching over 500,000 organizations each month worldwide. The phishing kit—developed, supported, and advertised by the threat actor tracked by Microsoft Threat Intelligence as Storm-1747—provided adversary-in-the-middle (AiTM) capabilities that allowed even less skilled threat actors to bypass multifactor authentication (MFA), significantly lowering the barrier to conducting account compromise at scale.

Tycoon2FA’s platform enabled threat actors to impersonate trusted brands by mimicking sign-in pages for services like Microsoft 365, OneDrive, Outlook, SharePoint, and Gmail. It also allowed threat actors using its service to establish persistence and to access sensitive information even after passwords are reset, unless active sessions and tokens were explicitly revoked. This worked by intercepting session cookies generated during the authentication process, simultaneously capturing user credentials. The MFA codes were subsequently relayed through Tycoon2FA’s proxy servers to the authenticating service.

To evade detection, Tycoon2FA used techniques like anti-bot screening, browser fingerprinting, heavy code obfuscation, self-hosted CAPTCHAs, custom JavaScript, and dynamic decoy pages. Targets are often lured through phishing emails containing attachments like .svg, .pdf, .html, or .docx files, often embedded with QR codes or JavaScript.

This blog provides a comprehensive up-to-date analysis of Tycoon2FA’s progression and scale. We share specific examples of the Tycoon2FA service panel, including a detailed analysis of Tycoon2FA infrastructure. Defending against Tycoon2FA and similar AiTM phishing threats requires a layered approach that blends technical controls with user awareness. This blog also provides Microsoft Defender detection and hunting guidance, as well as resources on how to set up mail flow rules, enforce spoof protections, and configure third-party connectors to prevent spoofed phishing messages from reaching user inboxes.

Operational overview of Tycoon2FA

Tycoon2FA customer panel

Tycoon2FA phishing services were advertised and sold to cybercriminals on applications like Telegram and Signal. Phish kits were observed to start at $120 USD for access to the panel for 10 days and $350 for access to the panel for a month, but these prices could vary.

Tycoon2FA is operated through a web‑based administration panel provided on a per user basis that centrally integrates all functionality provided by the Tycoon 2FA PhaaS platform. The panel serves as a single dashboard for configuring, tracking, and refining campaigns. While it does not include built‑in mailer capabilities, the panel provides the core components needed to support phishing campaigns. This includes pre‑built templates, attachment files for common lure formats, domain and hosting configuration, redirect logic, and victim tracking. This design makes the platform accessible to less technically skilled actors while still offering sufficient flexibility for more experienced operators.

After signing in, Tycoon2FA customers are presented with a dashboard used to configure, monitor, and manage phishing campaigns. Campaign operators can configure a broad set of campaign parameters that control how phishing content is delivered and presented to targets. Key settings include lure template selection and branding customization, redirection routing, MFA interception behavior, CAPTCHA appearance and logic, attachment generation, and exfiltration configuration. Campaign operators can choose from highly configurable landing pages and sign-in themes that impersonate widely trusted services such as Microsoft 365, Outlook, SharePoint, OneDrive, and Google, increasing the perceived legitimacy of attacks.

Campaign operators can also configure how the malicious content is delivered through attachments. Options include generating EML files, PDFs, and QR codes, offering multiple ways to package and distribute phishing lures.

The panel also allows operators to manage redirect chains and routing logic, including the use of intermediate pages and decoy destinations. Support for automated subdomain rotation and intermediary Cloudflare Workers-based URLs enables campaigns to adapt quickly as infrastructure is identified or blocked. The following is a visual example of redirect and routing options, including intermediate pages and decoy destinations used within a phishing campaign.

Once configured, these settings control the appearance and behavior of the phishing pages delivered to targets. The following examples show how selected themes (Microsoft 365 and Outlook) are rendered as legitimate-looking sign-in pages presented to targets.

Beyond campaign configuration, the panel provides detailed visibility into victim interaction and authentication outcomes. Operators can track valid and invalid sign-in attempts, MFA usage, and session cookie capture, with victim data organized by attributes such as targeted service, browser, location, and authentication status. Captured credentials and session cookies can be viewed or downloaded directly within the panel and/or forwarded to Telegram for near‑real‑time monitoring. The following image shows a summary view of victim account outcomes for threat actors to review and track.

Captured session information including account attributes, browsers and location metadata, and authentication artifacts are exfiltrated through Telegram bot.

In addition to configuration and campaign management features, the panel includes a section for announcements and updates related to the service. These updates reflect regular maintenance and ongoing changes, indicating that the service continues to evolve.

By combining centralized configuration, real-time visibility, and regular platform updates, the service enables scalable AiTM phishing operations that can adapt quickly to defensive measures. This balance of usability, adaptability, and sustained development has contributed to Tycoon2FA’s adoption across a wide range of campaigns.

Tycoon2FA infrastructure

Tycoon2FA’s infrastructure has shifted from static, high-entropy domains to a fast-moving ecosystem with diverse top-level domains (TLDs) and short-lived (often 24-72 hours) fully qualified domain names (FQDNs), with the majority hosted on Cloudflare. A key change is the move toward a broader mix of TLDs. Early tracking showed heavier use of regional TLDs like .es and .ru, but recent campaigns increasingly rotated across inexpensive generic TLDs that require little to no identity verification. Examples include .space, .email, .solutions, .live, .today, and .calendar, as well as second-level domains such as .sa[.]com, .in[.]net, and .com[.]de.

Tycoon2FA generated large numbers of subdomains for individual phishing campaigns, used them briefly, then dropped them and spun up new ones. Parent root domains might remain registered for weeks or months, but nearly all campaign-specific FQDNs were temporary. The rapid turnover complicated detection efforts, such as building reliable blocklists or relying on reputation-based defenses.

Subdomain patterns have also shifted toward more readable formats. Instead of high entropy or algorithmically generated strings, like those used in July 2025, newly observed subdomains used recognizable words tied to common workflows or services, like those observed in December 2025.

July 2025 campaign URL structure examples:

• hxxps://qonnfp.wnrathttb[.]ru/Fe2yiyoKvg3YTfV!/$EMAIL_ADDRESS
• hxxps://piwf.ariitdc[.]es/kv2gVMHLZ@dNeXt/$EMAIL_ADDRESS
• hxxps://q9y3.efwzxgd[.]es/MEaap8nZG5A@c8T/*EMAIL_ADDRESS
• hxxps://kzagniw[.]es/LI6vGlx7@1wPztdy

December 2025 campaign URL structure examples:

• hxxps://immutable.nathacha[.]digital/T@uWhi6jqZQH7/#?EMAIL_ADDRESS
• hxxps://mock.zuyistoo[.]today/pry1r75TisN5S@8yDDQI/$EMAIL_ADDRESS
• hxxps://astro.thorousha[.]ru/vojd4e50fw4o!g/$ENCODED EMAIL_ADDRESS
• hxxps://branch.cricomai[.]sa[.]com/b@GrBOPttIrJA/*EMAIL_ADDRESS
• hxxps://mysql.vecedoo[.]online/JB5ow79@fKst02/#EMAIL_ADDRESS
• hxxps://backend.vmfuiojitnlb[.]es/CGyP9!CbhSU22YT2/

Some subdomains resembled everyday processes or tech terms like cloud, desktop, application, and survey, while others echoed developer or admin vocabulary like python, terminal, xml, and faq. Software as a service (SaaS) brand names have appeared in subdomains as well, such as docker, zendesk, azure, microsoft, sharepoint, onedrive, and nordvpn. This shift was likely used to reduce user suspicion and to evade detection models that rely on entropy or string irregularity.

Tycoon2FA’s success stemmed from closely mimicking legitimate authentication processes while covertly intercepting both user credentials and session tokens, granting attackers full access to targeted accounts. Tycoon2FA operators could bypass nearly all commonly deployed MFA methods, including SMS codes, one-time passcodes, and push notifications. The attack chain was typical yet highly effective and started with phishing the user through email, followed by a multilayer redirect chain, then a spoofed sign-in page with AiTM relay, and authentication relay culminating in token theft.

Tycoon2FA phishing emails

In observed campaigns, threat actors gained initial access through phishing emails that used either embedded links or malicious attachments. Most of Tycoon2FA’s lures fell into four categories:

• PDF or DOC/DOCX attachments with QR codes
• SVG files containing embedded redirect logic
• HTML attachments with short messages
• Redirect links that appear to come from trusted services

Email lures were crafted from ready-made templates that impersonated trusted business applications like Microsoft 365, Azure, Okta, OneDrive, Docusign, and SharePoint. These templates spanned themes from generic notifications (like voicemail and shared document access) to targeted workflows (like human resources (HR) updates, corporate documents, and financial statements). In addition to spoofing trusted brands, phishing emails often leveraged compromised accounts with existing threads to increase legitimacy.

While Tycoon2FA supplied hosting infrastructures, along with various phishing and landing page related templates, email distribution was not provided by the service.

Defense evasion

From a defense standpoint, Tycoon2FA stood out for its continuously updated evasion and attack techniques. A defining feature was the use of constantly changing custom CAPTCHA pages that regenerated frequently and varied across campaigns. As a result, static signatures and narrowly scoped detection logic became less effective over time. Before credentials were entered, targets encounter the custom CAPTCHA challenge, which was designed to block automated scanners and ensure real users reach the phishing content. These challenges often used randomized HTML5 canvas elements, making them hard to bypass with automation. While Cloudflare Turnstile was once the primary CAPTCHA, Tycoon2FA shifted to using a rotating set of custom CAPTCHA challenges. The CAPTCHA acted as a gate in the flow, legitimizing the process and nudging the target to continue.

After the CAPTCHA challenge, the user was shown a dynamically generated sign-in portal that mirrored the targeted service’s branding and authentication flow, most often Microsoft or Gmail. The page might even include company branding to enhance legitimacy. When the user submitted credentials, Tycoon2FA immediately relayed them to the real service, triggering the genuine MFA challenge. The phishing page then displayed the same MFA prompt (for example, number matching or code entry). Once the user completed MFA, the attacker captured the session cookie and gained real-time access without needing further authentication, even if the password was changed later. These pages were created with heavily obfuscated and randomized JavaScript and HTML, designed to evade signature-based detection and other security tools.

The phishing kit also disrupted analysis through obfuscation and dynamic code generation, including nonfunctional dead code, to defeat consistent fingerprinting. When the campaign infrastructure encountered an unexpected or invalid server response (for example, a geolocation outside the allowed targeting zone), the kit replaced phishing content with a decoy page or a benign redirect to avoid exposing the live credential phishing site.

Tycoon2FA further complicated investigation by actively checking for analysis of environments or browser automation and adjusting page behavior if detected. These evasive measures included:

• Intercepting user input
  • Keystroke monitoring
  • Blocking copy/paste and right click functions
• Detecting or blocking automated inspection
  • Automation tools (for example, PhantomJS, Burp Suite)
  • Disabling common developer tool shortcuts
• Validating and filtering incoming traffic
  • Browser fingerprinting
  • Datacenter IP filtering
  • Geolocation restrictions
  • Suspicious user agent profiling
• Increased obfuscation
  • Encoded content (Base64, Base91)
  • Fragmented or concatenated strings
  • Invisible Unicode characters
  • Layered URL/URI encoding
  • Dead or nonfunctional script

If analysis was suspected at any point, the kit redirected to a legitimate decoy site or threw a 404 error.

Complementing these anti-analysis measures, Tycoon2FA used increasingly complex redirect logic. Instead of sending victims directly to the phishing page, it chained multiple intermediate hosts, such as Azure Blob Storage, Firebase, Wix, TikTok, or Google resources, to lend legitimacy to the redirect path. Recent changes combined these redirect chains with encoded Uniform Resource Identifier (URI) strings that obscured full URL paths and landing points, frustrating both static URL extraction and detonation attempts. Stacked together, these tactics made Tycoon2FA a resilient, fast-moving system that evaded both automated and manual detection efforts.

Credential theft and account access

Captured credentials and session tokens were exfiltrated over encrypted channels, often via Telegram bots. Attackers could then access sensitive data and establish persistence by modifying mailbox rules, registering new authenticator apps, or launching follow-on phishing campaigns from compromised accounts. The following diagram breaks down the AiTM process.

Tycoon2FA illustrated the evolution of phishing kits in response to rising enterprise defenses, adapting its lures, infrastructure, and evasion techniques to stay ahead of detection. As organizations increasingly adopt MFA, attackers are shifting to tools that target the authentication process itself instead of attempting to circumvent it. Coupled with affordability, scalability, and ease of use, Tycoon2FA posed a persistent and significant threat to both consumer and enterprise accounts, especially those that rely on MFA as a primary safeguard.

Mitigation and protection guidance

Mitigating threats from phishing actors begins with securing user identity by eliminating traditional credentials and adopting passwordless, phishing-resistant MFA methods such as FIDO2 security keys, Windows Hello for Business, and Microsoft Authenticator passkeys.

Microsoft Threat Intelligence recommends enforcing phishing-resistant MFA for privileged roles in Microsoft Entra ID to significantly reduce the risk of account compromise. Learn how to require phishing-resistant MFA for admin roles and plan a passwordless deployment.

Passwordless authentication improves security as well as enhances user experience and reduces IT overhead. Explore Microsoft’s overview of passwordless authentication and authentication strength guidance to understand how to align your organization’s policies with best practices. For broader strategies on defending against identity-based attacks, refer to Microsoft’s blog on evolving identity attack techniques.

If Microsoft Defender alerts indicate suspicious activity or confirmed compromised account or a system, it’s essential to act quickly and thoroughly. The following are recommended remediation steps for each affected identity:

1. Reset credentials – Immediately reset the account’s password and revoke any active sessions or tokens. This ensures that any stolen credentials can no longer be used.
2. Re-register or remove MFA devices – Review users’ MFA devices, specifically those recently added or updated.
3. Revert unauthorized payroll or financial changes – If the attacker modified payroll or financial configurations, such as direct deposit details, revert them to their original state and notify the appropriate internal teams.
4. Remove malicious inbox rules – Attackers often create inbox rules to hide their activity or forward sensitive data. Review and delete any suspicious or unauthorized rules.
5. Verify MFA reconfiguration – Confirm that the user has successfully reconfigured MFA and that the new setup uses secure, phishing-resistant methods.

To defend against the wide range of phishing threats, Microsoft Threat Intelligence recommends the following mitigation steps:

• Review our recommended settings for Exchange Online Protection and Microsoft Defender for Office 365.
• Configure Microsoft Defender for Office 365 to recheck links on click. Safe Links provides URL scanning and rewriting of inbound email messages in mail flow, and time-of-click verification of URLs and links in email messages, other Microsoft 365 applications such as Teams, and other locations such as SharePoint Online. Safe Links scanning occurs in addition to the regular anti-spam and anti-malware protection in inbound email messages in Microsoft Exchange Online Protection (EOP). Safe Links scanning can help protect your organization from malicious links used in phishing and other attacks.
• Turn on Zero-hour auto purge (ZAP) in Defender for Office 365 to quarantine sent mail in response to newly-acquired threat intelligence and retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.
• Turn on Safe Links and Safe Attachments in Microsoft Defender for Office 365.
• Enable network protection in Microsoft Defender for Endpoint.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Turn on cloud-delivered protection in Microsoft Defender Antivirus or the equivalent for your antivirus product to cover rapidly evolving attack tools and techniques. Cloud-based machine learning protections block a majority of new and unknown variants
• Use the Attack Simulator in Microsoft Defender for Office 365 to run realistic, yet safe, simulated phishing and password attack campaigns. Run spear-phishing (credential harvest) simulations to train end-users against clicking URLs in unsolicited messages and disclosing credentials.
• Configure automatic attack disruption in Microsoft Defender XDR. Automatic attack disruption is designed to contain attacks in progress, limit the impact on an organization’s assets, and provide more time for security teams to remediate the attack fully.
• Configure Microsoft Entra with increased security.
• Pilot and deploy phishing-resistant authentication methods for users.
• Implement Entra ID Conditional Access authentication strength to require phishing-resistant authentication for employees and external users for critical apps.

Microsoft Defender detections

Microsoft Defender customers can refer to the list of applicable detections below. Microsoft Defender coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Customers with provisioned access can also use Microsoft Security Copilot in Microsoft Defender to investigate and respond to incidents, hunt for threats, and protect their organization with relevant threat intelligence.

The following alerts might indicate threat activity associated with this threat. These alerts, however, can be triggered by unrelated threat activity and are not monitored in the status cards provided with this report.

Additionally, using Microsoft Defender for Cloud Apps connectors, Microsoft Defender XDR raises AiTM-related alerts in multiple scenarios. For Microsoft Entra ID customers using Microsoft Edge, attempts by attackers to replay session cookies to access cloud applications are detected by Microsoft Defender XDR through Defender for Cloud Apps connectors for Microsoft Office 365 and Azure. In such scenarios, Microsoft Defender XDR raises the following alerts:

• Stolen session cookie was used
• User compromised through session cookie hijack

Microsoft Defender XDR raises the following alerts by combining Microsoft Defender for Office 365 URL click and Microsoft Entra ID Protection risky sign-ins signal.

• Possible AiTM phishing attempt
• Risky sign-in attempt after clicking a possible AiTM phishing URL

Microsoft Security Copilot

Microsoft Security Copilot is embedded in Microsoft Defender and provides security teams with AI-powered capabilities to summarize incidents, analyze files and scripts, summarize identities, use guided responses, and generate device summaries, hunting queries, and incident reports.

Customers can also deploy AI agents, including the following Microsoft Security Copilot agents, to perform security tasks efficiently:

• Threat Intelligence Briefing agent
• Phishing Triage agent
• Threat Hunting agent
• Dynamic Threat Detection agent

Security Copilot is also available as a standalone experience where customers can perform specific security-related tasks, such as incident investigation, user analysis, and vulnerability impact assessment. In addition, Security Copilot offers developer scenarios that allow customers to build, test, publish, and integrate AI agents and plugins to meet unique security needs.

Threat intelligence reports

Microsoft Defender XDR customers can use the following threat analytics reports in the Defender portal (requires license for at least one Defender XDR product) to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments:

• Actor profile: Storm-1747
• Tool profile: Tycoon2FA
• Technique profile: Adversary-in-the-middle credential phishing

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Advanced hunting

Microsoft Defender customers can run the following advanced hunting queries to find activity associated with Tycoon2FA.

Suspicious sign-in attempts

Find identities potentially compromised by AiTM attacks:

AADSignInEventsBeta
| where Timestamp > ago(7d)
| where IsManaged != 1
| where IsCompliant != 1
//Filtering only for medium and high risk sign-in
| where RiskLevelDuringSignIn in (50, 100)
| where ClientAppUsed == "Browser"
| where isempty(DeviceTrustType)
| where isnotempty(State) or isnotempty(Country) or isnotempty(City)
| where isnotempty(IPAddress)
| where isnotempty(AccountObjectId)
| where isempty(DeviceName)
| where isempty(AadDeviceId)
| project Timestamp,IPAddress, AccountObjectId, ApplicationId, SessionId, RiskLevelDuringSignIn, Browser

Suspicious URL clicks from emails

Look for any suspicious URL clicks from emails by a user before their risky sign-in:

UrlClickEvents
| where Timestamp between (start .. end) //Timestamp around time proximity of Risky signin by user
| where AccountUpn has "" and ActionType has "ClickAllowed"
| project Timestamp,Url,NetworkMessageId

References

• Tycoon 2FA Malware Analysis, Overview by ANY.RUN

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky.

To hear stories and insights from the Microsoft Threat Intelligence community about the ever-evolving threat landscape, listen to the Microsoft Threat Intelligence podcast.

The post Inside Tycoon2FA: How a leading AiTM phishing kit operated at scale appeared first on Microsoft Security Blog.

Following the initial compromise, the attackers leveraged trusted internal identities from the target to conduct large‑scale intra‑organizational and external phishing, significantly expanding the scope of the campaign. Defender detections surfaced the activity to all affected organizations.

This attack demonstrates the operational complexity of AiTM campaigns and the need for remediation beyond standard identity compromise responses. Password resets alone are insufficient. Impacted organizations in the energy sector must additionally revoke active session cookies and remove attacker-created inbox rules used to evade detection.

Attack chain: AiTM phishing attack

Stage 1: Initial access via trusted vendor compromise

Analysis of the initial access vector indicates that the campaign leveraged a phishing email sent from an email address belonging to a trusted organization, likely compromised before the operation began. The lure employed a SharePoint URL requiring user authentication and used subject‑line mimicry consistent with legitimate SharePoint document‑sharing workflows to increase credibility.

Threat actors continue to leverage trusted cloud collaboration platforms particularly Microsoft SharePoint and OneDrive due to their ubiquity in enterprise environments. These services offer built‑in legitimacy, flexible file‑hosting capabilities, and authentication flows that adversaries can repurpose to obscure malicious intent. This widespread familiarity enables attackers to deliver phishing links and hosted payloads that frequently evade traditional email‑centric detection mechanisms.

Stage 2: Malicious URL clicks

Threat actors often abuse legitimate services and brands to avoid detection. In this scenario, we observed that the attacker leveraged the SharePoint service for the phishing campaign. While threat actors may attempt to abuse widely trusted platforms, Microsoft continuously invests in safeguards, detections, and abuse prevention to limit misuse of our services and to rapidly detect and disrupt malicious activity

Stage 3: AiTM attack

Access to the URL redirected users to a credential prompt, but visibility into the attack flow did not extend beyond the landing page.

Stage 4: Inbox rule creation

The attacker later signed in with another IP address and created an Inbox rule with parameters to delete all incoming emails on the user’s mailbox and marked all the emails as read.

Stage 5: Phishing campaign

Followed by Inbox rule creation, the attacker initiated a large-scale phishing campaign involving more than 600 emails with another phishing URL. The emails were sent to the compromised user’s contacts, both within and outside of the organization, as well as distribution lists. The recipients were identified based on the recent email threads in the compromised user’s inbox.

Stage 6: BEC tactics

The attacker then monitored the victim user’s mailbox for undelivered and out of office emails and deleted them from the Archive folder. The attacker read the emails from the recipients who raised questions regarding the authenticity of the phishing email and responded, possibly to falsely confirm that the email is legitimate. The emails and responses were then deleted from the mailbox. These techniques are common in any BEC attacks and are intended to keep the victim unaware of the attacker’s operations, thus helping in persistence.

Stage 7: Accounts compromise

The recipients of the phishing emails from within the organization who clicked on the malicious URL were also targeted by another AiTM attack. Microsoft Defender Experts identified all compromised users based on the landing IP and the sign-in IP patterns. 

Mitigation and protection guidance

Microsoft Defender XDR detects suspicious activities related to AiTM phishing attacks and their follow-on activities, such as sign-in attempts on multiple accounts and creation of malicious rules on compromised accounts. To further protect themselves from similar attacks, organizations should also consider complementing MFA with conditional access policies, where sign-in requests are evaluated using additional identity-driven signals like user or group membership, IP location information, and device status, among others.

Defender Experts also initiated rapid response with Microsoft Defender XDR to contain the attack including:

• Automatically disrupting the AiTM attack on behalf of the impacted users based on the signals observed in the campaign.
• Initiating zero-hour auto purge (ZAP) in Microsoft Defender XDR to find and take automated actions on the emails that are a part of the phishing campaign.

Defender Experts further worked with customers to remediate compromised identities through the following recommendations:

• Revoking session cookies in addition to resetting passwords.
• Revoking the MFA setting changes made by the attacker on the compromised user’s accounts.
• Deleting suspicious rules created on the compromised accounts.

Mitigating AiTM phishing attacks

The general remediation measure for any identity compromise is to reset the password for the compromised user. However, in AiTM attacks, since the sign-in session is compromised, password reset is not an effective solution. Additionally, even if the compromised user’s password is reset and sessions are revoked, the attacker can set up persistence methods to sign-in in a controlled manner by tampering with MFA. For instance, the attacker can add a new MFA policy to sign in with a one-time password (OTP) sent to attacker’s registered mobile number. With these persistence mechanisms in place, the attacker can have control over the victim’s account despite conventional remediation measures.

While AiTM phishing attempts to circumvent MFA, implementation of MFA still remains an essential pillar in identity security and highly effective at stopping a wide variety of threats. MFA is the reason that threat actors developed the AiTM session cookie theft technique in the first place. Organizations are advised to work with their identity provider to ensure security controls like MFA are in place. Microsoft customers can implement MFA through various methods, such as using the Microsoft Authenticator, FIDO2 security keys, and certificate-based authentication.

Defenders can also complement MFA with the following solutions and best practices to further protect their organizations from such attacks:

• Use security defaults as a baseline set of policies to improve identity security posture. For more granular control, enable conditional access policies, especially risk-based access policies. Conditional access policies evaluate sign-in requests using additional identity-driven signals like user or group membership, IP location information, and device status, among others, and are enforced for suspicious sign-ins. Organizations can protect themselves from attacks that leverage stolen credentials by enabling policies such as compliant devices, trusted IP address requirements, or risk-based policies with proper access control.
• Implement continuous access evaluation.
• Invest in advanced anti-phishing solutions that monitor and scan incoming emails and visited websites. For example, organizations can leverage web browsers that automatically identify and block malicious websites, including those used in this phishing campaign, and solutions that detect and block malicious emails, links, and files.
• Continuously monitor suspicious or anomalous activities. Hunt for sign-in attempts with suspicious characteristics (for example, location, ISP, user agent, and use of anonymizer services).

Detections

Because AiTM phishing attacks are complex threats, they require solutions that leverage signals from multiple sources. Microsoft Defender XDR uses its cross-domain visibility to detect malicious activities related to AiTM, such as session cookie theft and attempts to use stolen cookies for signing in.

Using Microsoft Defender for Cloud Apps connectors, Microsoft Defender XDR raises AiTM-related alerts in multiple scenarios. For Microsoft Entra ID customers using Microsoft Edge, attempts by attackers to replay session cookies to access cloud applications are detected by Defender for Cloud Apps connectors for Microsoft 365 and Azure. In such scenarios, Microsoft Defender XDR raises the following alert:

• Stolen session cookie was used

In addition, signals from these Defender for Cloud Apps connectors, combined with data from the Defender for Endpoint network protection capabilities, also triggers the following Microsoft Defender XDR alert on Microsoft Entra ID. environments:

• Possible AiTM phishing attempt

A specific Defender for Cloud Apps connector for Okta, together with Defender for Endpoint, also helps detect AiTM attacks on Okta accounts using the following alert:

• Possible AiTM phishing attempt in Okta

Other detections that show potentially related activity are the following:

Microsoft Defender for Office 365

• Email messages containing malicious file removed after delivery
• Email messages from a campaign removed after delivery
• A potentially malicious URL click was detected
• A user clicked through to a potentially malicious URL
• Suspicious email sending patterns detected

Microsoft Defender for Cloud Apps

• Suspicious inbox manipulation rule
• Impossible travel activity
• Activity from infrequent country
• Suspicious email deletion activity

Microsoft Entra ID Protection

• Anomalous Token
• Unfamiliar sign-in properties
• Unfamiliar sign-in properties for session cookies

Microsoft Defender XDR

• BEC-related credential harvesting attack
• Suspicious phishing emails sent by BEC-related user

Indicators of Compromise

• Network Indicators
  • 178.130.46.8 – Attacker infrastructure
  • 193.36.221.10 – Attacker infrastructure

Recommended actions

Microsoft recommends the following mitigations to reduce the impact of this threat:

• Enable Conditional Access policies in Microsoft Entra, especially risk-based access policies. Conditional access policies evaluate sign-in requests using additional identity-driven signals like user or group membership, IP address location information, and device status, among others, are enforced for suspicious sign-ins. Organizations can protect themselves from attacks that leverage stolen credentials by enabling policies such as compliant devices, Azure trusted IP address requirements, or risk-based policies with proper access control. If you are still evaluating Conditional Access, use security defaults as an initial baseline set of policies to improve identity security posture.
• Implement continuous access evaluation.
• Implement Microsoft Entra passwordless sign-in with FIDO2 security keys.
• Turn on network protection in Microsoft Defender for Endpoint to block connections to malicious domains and IP addresses.
• Implement Microsoft Defender for Endpoint – Mobile Threat Defense on mobile devices used to access enterprise assets.
• Leverage Microsoft Edge automatically identify and block malicious websites, including those used in this phishing campaign, and Microsoft Defender for Office 365 to detect and block malicious emails, links, and files. Monitor suspicious or anomalous activities in Microsoft Entra ID Protection. Investigate sign-in attempts with suspicious characteristics (such as the location, ISP, user agent, and use of anonymizer services). Educate users about the risks of secure file sharing and emails from trusted vendors.

Hunting queries – Microsoft XDR

AHQ#1 – Phishing Campaign:

EmailEvents

| where Subject has “NEW PROPOSAL – NDA”

AHQ#2 – Sign-in activity from the suspicious IP Addresses

AADSignInEventsBeta

| where Timestamp >= ago(7d)

| where IPAddress startswith “178.130.46.” or IPAddress startswith “193.36.221.”

Microsoft Sentinel

Microsoft Sentinel customers can use the following analytic templates to find BEC related activities similar to those described in this post:

• Exchange workflow MailItemsAccessed operation anomaly
• Malicious Inbox Rule
• SharePointFileOperation via previously unseen IPs
• SharePointFileOperation via devices with previously unseen user agents
• User login from different countries within 3 hours
• TI Matching Analytics

In addition to the analytic templates listed above, Microsoft Sentinel customers can use the following hunting content to perform Hunts for BEC related activities:

• Possible AiTM phishing attempt against Microsoft Entra ID
• Unfamiliar Signin Correlation with AzurePortal Signin Attempts and AuditLogs
• Multiple users email forwarded to same destination
• Sign-ins From VPS providers

The post Resurgence of a multi‑stage AiTM phishing and BEC campaign abusing SharePoint  appeared first on Microsoft Security Blog.

Phishing actors are exploiting complex routing scenarios and misconfigured spoof protections to effectively spoof organizations’ domains and deliver phishing emails that appear, superficially, to have been sent internally. Threat actors have leveraged this vector to deliver a wide variety of phishing messages related to various phishing-as-a-service (PhaaS) platforms such as Tycoon2FA. These include messages with lures themed around voicemails, shared documents, communications from human resources (HR) departments, password resets or expirations, and others, leading to credential phishing.

This attack vector is not new but has seen increased visibility and use since May 2025. The phishing campaigns Microsoft has observed using this attack vector are opportunistic rather than targeted in nature, with messages sent to a wide variety of organizations across several industries and verticals. Notably, Microsoft has also observed a campaign leveraging this vector to conduct financial scams against organizations. While these attacks share many characteristics with other credential phishing email campaigns, the attack vector abusing complex routing and improperly configured spoof protections distinguishes these campaigns. The phishing attack vector covered in this blog post does not affect customers whose Microsoft Exchange mail exchanger (MX) records point to Office 365; these tenants are protected by native built-in spoofing detections.

Phishing messages sent through this vector may be more effective as they appear to be internally sent messages. Successful credential compromise through phishing attacks may lead to data theft or business email compromise (BEC) attacks against the affected organization or partners and may require extensive remediation efforts, and/or lead to loss of funds in the case of financial scams. While Microsoft detects the majority of these phishing attack attempts, organizations can further reduce risk by properly configuring spoof protections and any third-party connectors to prevent spoofed phish or scam messages sent through this attack vector from reaching inboxes.

In this blog, we explain how threat actors are exploiting these routing scenarios and provide observations from related attacks. We provide specific examples—including technical analysis of phishing messages, spoof protections, and email headers—to help identify this attack vector. This blog also provides additional resources with information on how to set up mail flow rules, enforce spoof protections, and configure third-party connectors to prevent spoofed phishing messages from reaching user inboxes.

Spoofed phishing attacks

In cases where a tenant has configured a complex routing scenario, where the MX records are not pointed to Office 365, and the tenant has not configured strictly enforced spoof protections, threat actors may be able to send spoofed phishing messages that appear to have come from the tenant’s own domain. Setting strict Domain-based Message Authentication, Reporting, and Conformance (DMARC) reject and SPF hard fail (rather than soft fail) policies and properly configuring any third-party connectors will prevent phishing attacks spoofing organizations’ domains.

This vector is not, as has been publicly reported, a vulnerability of Direct Send, a mail flow method in Microsoft 365 Exchange Online that allows devices (like printers, scanners), applications, or third-party services to send email without authentication using the organization’s accepted domain, but rather takes advantage of complex routing scenarios and misconfigured spoof protections. Tenants with MX records pointed directly to Office 365 are not vulnerable to this attack vector of sending spoofed phishing messages.

As with most other phishing attacks observed by Microsoft Threat intelligence throughout 2025, the bulk of phishing campaigns observed using this attack vector employ the Tycoon2FA PhaaS platform, in addition to several other phishing services in use as well. In October 2025, Microsoft Defender for Office 365 blocked more than 13 million malicious emails linked to Tycoon2FA, including many attacks spoofing organizations’ domains. PhaaS platforms such as Tycoon2FA provide threat actors with a suite of capabilities, support, and ready-made lures and infrastructure to carry out phishing attacks and compromise credentials. These capabilities include adversary-in-the-middle (AiTM) phishing, which is intended to circumvent multifactor authentication (MFA) protections. Credential phishing attacks sent through this method employ a variety of themes such as voicemail notifications, password resets, HR communications, among others.

Microsoft Threat Intelligence has also observed emails intended to trick organizations into paying fake invoices, potentially leading to financial losses. Generally, in these spoofed phishing attacks, the recipient email address is used in both the “To” and “From” fields of the email, though some attacks will change the display name of the sender to make the attack more convincing and the “From” field could contain any valid internal email address.

Credential phishing with spoofed emails

The bulk of phishing messages sent through this attack vector uses the same lures as conventionally sent phishing messages, masquerading as services such as Docusign, or communications from HR regarding salary or benefits changes, password resets, and so on. They may employ clickable links in the email body or QR codes in attachments or other means of getting the recipient to navigate to a phish landing page. The appearance of having been sent from an internal email address is the most visible distinction to an end user, often with the same email address used in the “To” and “From” fields.

Email headers provide more information regarding the delivery of spoofed phishing emails, such as the appearance of an external IP address used by the threat actor to initiate the phishing attack. Depending on the configuration of the tenant, there will be SPF soft or hard fail, DMARC fail, and DKIM will equal none as both the sender and recipient appear to be in the same domain. At a basic level of protection, these should cause a message to land in a spam folder, but a user may retrieve and interact with phishing messages routed to spam. The X-MS-Exchange-Organization-InternalOrgSender will be set to True, but X-MS-Exchange-Organization-MessageDirectionality will be set to Incoming and X-MS-Exchange-Organization-ASDirectionalityType will have a value of “1”, indicating that the message was sent from outside of the organization. The combination of internal organization sender and incoming directionality is indicative of a message spoofed to appear as an internal communication, but not necessarily indicative of maliciousness. X-MS-Exchange-Organization-AuthAs will be set to Anonymous, indicating that the message came from an external source.

The Authentication-Results header example provided below illustrates the result of enforced authentication. 000 is an explicit DMARC failure. The resultant action is either reject or quarantine. The headers shown here are examples of properly configured environments, effectively blocking phishing emails sent through this attack vector:

spf=fail (sender IP is 51.89.59[.]188) smtp.mailfrom=contoso.com; dkim=none (message not signed) header.d=none;dmarc=fail action=quarantine header.from=contoso.com;compauth=fail reason=000

spf=fail (sender IP is 51.68.182[.]101) smtp.mailfrom= contoso.com; dkim=none (message not signed) header.d=none;dmarc=fail action=oreject header.from=contoso.com;

Any third-party connectors—such as a spam filtering service, security solution, or archiving service—must be configured properly or spoof detections cannot be calculated correctly, allowing phishing emails such as the examples below to be delivered. The first of these examples indicate the expected authentication failures in the header, but no action is taken due to reason 905, which indicates that the tenant has set up complex routing where the mail exchanger record (MX record) points to either an on-premises Exchange environment or a third-party service before reaching Microsoft 365:

spf=fail (sender IP is 176.111.219[.]85) smtp.mailfrom= contoso.com; dkim=none (message not signed) header.d=none;dmarc=fail action=none header.from= contoso.com;compauth=none reason=905

The phishing message masquerades as a notification from Microsoft Office 365 informing the recipient that their password will soon expire, although the subject line appears to be intended for a voicemail themed lure. The link in the email is a nested Google Maps URL pointing to an actor-controlled domain at online.amphen0l-fci[.]com.

The second example also shows the expected authentication failures, but with an action of “oreject” with reason 451, indicating complex routing and that the message was delivered to the spam folder.

spf=softfail (sender IP is 162.19.129[.]232) smtp.mailfrom=contoso.com; dkim=none (message not signed) header.d=none;dmarc=fail action=oreject header.from=contoso.com;compauth=none reason=451

This email masquerades as a SharePoint communication asking the recipient to review a shared document. The sender and recipient addresses are the same, though the threat actor has set the display name of the sender to “Pending Approval”. The InternalOrgSender header is set to True. On the surface, this appears to be an internally sent email, though the use of the recipient’s address in both the “To” and “From” fields may alert an end user that this message is not legitimate.

The nested Google URL in the email body points to actor-controlled domain scanuae[.]com. This domain acts as a redirector, loading a script that constructs a URL using the recipient’s Base64-encoded email before loading a custom CAPTCHA page on the Tycoon2FA domain valoufroo.in[.]net. A sample of the script loaded on scanuae[.]com is shown here:

The below example of the custom CAPTCHA page is loaded at the Tycoon2FA domain goorooyi.yoshemo.in[.]net. The CAPTCHA is one of many similar CAPTCHAs observed in relation to Tycoon2FA phishing sequences. Clicking through it leads to a Tycoon2FA phish landing page where the recipient is prompted to input their credentials. Alternatively, clicking through the CAPTCHA may lead to a benign page on a legitimate domain, a tactic intended to evade detection and analysis.

Spoofed email financial scams

Microsoft Threat Intelligence has also observed financial scams sent through spoofed emails. These messages are crafted to look like an email thread between a highly placed employee at the targeted organization, often the CEO of the organization, an individual requesting payment for services rendered, or the accounting department at the targeted organization. In this example, the message was initiated from 163.5.169[.]67 and authentication failures were not enforced, as DMARC is set to none and action is set to none, a permissive mode that does not protect against spoofed messages, allowing the message to reach the inbox on a tenant whose MX record is not pointed to Office 365.

Authentication-Results	spf=fail (sender IP is 163.5.169[.]67) smtp.mailfrom=contoso.com; dkim=none (message not signed) header.d=none;dmarc=none action=none header.from=contoso.com;compauth=fail reason=601

The scam message is crafted to appear as an email thread with a previous message between the CEO of the targeted organization, using the CEO’s real name, and an individual requesting payment of an invoice. The name of the individual requesting payment (here replaced with “John Doe”) appears to be a real person, likely a victim of identity theft. The “To” and “From” fields both use the address for the accounting department at the targeted organization, but with the CEO’s name used as the display name in the “From” field. As with our previous examples, this email superficially appears to be internal to the organization, with only the use of the same address as sender and recipient indicating that the message may not be legitimate. The body of the message also attempts to instill a sense of urgency, asking for prompt payment to retain a discount.

Most of the emails observed as part of this campaign include three attached files. The first is the fake invoice requesting several thousand dollars to be sent through ACH payment to a bank account at an online banking company. The name of the individual requesting payment is also listed along with a fake company name and address. The bank account was likely set up using the individual’s stolen personally identifiable information.

The second attachment (not pictured) is an IRS W-9 form that lists the name and social security number of the individual used to set up the bank account. The third attachment is a fake “bank letter” ostensibly provided by an employee at the online bank used to set up the fraudulent account. The letter provides the same banking information as the invoice and attempts to add another layer of believability to the scam.

Falling victim to this scam could result in significant financial losses that may not be recoverable as the funds will likely be moved quickly by the actor in control of the fraudulent bank account.  

Mitigation and protection guidance

Preventing spoofed email attacks

The following links provide information for customers whose MX records are not pointed to Office 365 on how to configure mail flow connectors and rules to prevent spoofed emails from reaching inboxes.

• These links provide information on how to properly configure mail flow with connectors:
  • Manage mail flow using a third-party cloud service with Exchange Online
  • Configure mail flow using connectors in Exchange Online
  • Mail flow rules (transport rules) in Exchange Online
  • Enhanced filtering for connectors in Exchange Online
• These links provide information on configuring SPF, DKIM, and DMARC:
  • Email authentication in cloud organizations
  • Set up SPF to identify valid email sources for your custom cloud domains
  • Set up DKIM to sign mail from your cloud domain
  • Set up DMARC to validate the From address domain for cloud senders
• The following links provide more in-depth information on Direct Send:
  • Introducing more control over Direct Send in Exchange Online
  • Direct Send vs sending directly to an Exchange Online tenant

Mitigating AiTM phishing attacks

Microsoft Threat Intelligence recommends the following mitigations, which are effective against a range of phishing threats.

• Review our recommended settings for Exchange Online Protection and Microsoft Defender for Office 365.
• Configure Microsoft Defender for Office 365 to recheck links on click. Safe Links provides URL scanning and rewriting of inbound email messages in mail flow, and time-of-click verification of URLs and links in email messages, other Microsoft 365 applications such as Teams, and other locations such as SharePoint Online. Safe Links scanning occurs in addition to the regular anti-spam and anti-malware protection in inbound email messages in Microsoft Exchange Online Protection (EOP). Safe Links scanning can help protect your organization from malicious links used in phishing and other attacks.
• Turn on Zero-hour auto purge (ZAP) in Defender for Office 365 to quarantine sent mail in response to newly-acquired threat intelligence and retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Turn on cloud-delivered protection in Microsoft Defender Antivirus or the equivalent for your antivirus product to cover rapidly evolving attack tools and techniques. Cloud-based machine learning protections block a majority of new and unknown variants
• Configure Microsoft Entra with increased security.
• Pilot and deploy phishing-resistant authentication methods for users.
• Implement Entra ID Conditional Access authentication strength to require phishing-resistant authentication for employees and external users for critical apps.

Mitigating threats from phishing actors begins with securing user identity by eliminating traditional credentials and adopting passwordless, phishing-resistant MFA methods such as FIDO2 security keys, Windows Hello for Business, and Microsoft Authenticator passkeys.

Microsoft recommends enforcing phishing-resistant MFA for privileged roles in Microsoft Entra ID to significantly reduce the risk of account compromise. Learn how to require phishing-resistant MFA for admin roles and plan a passwordless deployment.

Passwordless authentication improves security as well as enhances user experience and reduces IT overhead. Explore Microsoft’s overview of passwordless authentication and authentication strength guidance to understand how to align your organization’s policies with best practices. For broader strategies on defending against identity-based attacks, refer to Microsoft’s blog on evolving identity attack techniques.

If Microsoft Defender alerts indicate suspicious activity or confirmed compromised account or a system, it’s essential to act quickly and thoroughly. Below are recommended remediation steps for each affected identity:

1. Reset credentials – Immediately reset the account’s password and revoke any active sessions or tokens. This ensures that any stolen credentials can no longer be used.
2. Re-register or remove MFA devices – Review users MFA devices, specifically those recently added or updated.
3. Revert unauthorized payroll or financial changes – If the attacker modified payroll or financial configurations, such as direct deposit details, revert them to their original state and notify the appropriate internal teams.
4. Remove malicious inbox rules – Attackers often create inbox rules to hide their activity or forward sensitive data. Review and delete any suspicious or unauthorized rules.
5. Verify MFA reconfiguration – Confirm that the user has successfully reconfigured MFA and that the new setup uses secure, phishing-resistant methods.

Microsoft Defender XDR detections

Microsoft Defender XDR coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Customers with provisioned access can also use Microsoft Security Copilot in Microsoft Defender to investigate and respond to incidents, hunt for threats, and protect their organization with relevant threat intelligence.

Microsoft Security Copilot

Security Copilot customers can use the standalone experience to create their own prompts or run the following prebuilt promptbooks to automate incident response or investigation tasks related to this threat:

• Incident investigation
• Microsoft User analysis
• Threat actor profile
• Threat Intelligence 360 report based on MDTI article
• Vulnerability impact assessment

Note that some promptbooks require access to plugins for Microsoft products such as Microsoft Defender XDR or Microsoft Sentinel.

Threat intelligence reports

Microsoft customers can use the following reports in Microsoft products to get the most up-to-date information about the threat actor, malicious activity, and techniques discussed in this blog. These reports provide the intelligence, protection information, and recommended actions to prevent, mitigate, or respond to associated threats found in customer environments.

• Actor profile: Storm-1747
• Technique profile: Adversary-in-the-middle credential phishing

Microsoft Security Copilot customers can also use the Microsoft Security Copilot integration in Microsoft Defender Threat Intelligence, either in the Security Copilot standalone portal or in the embedded experience in the Microsoft Defender portal to get more information about this threat actor.

Hunting queries

Microsoft Defender XDR

Microsoft Defender XDR customers can run the following query to find related activity in their networks:

Finding potentially spoofed emails:

EmailEvents
| where Timestamp >= ago(30d)
| where EmailDirection == "Inbound"
| where Connectors == ""  // No connector used
| where SenderFromDomain in ("contoso.com")  // Replace with your domain(s)
| project Timestamp, NetworkMessageId, InternetMessageId, SenderMailFromAddress,
          SenderFromAddress, SenderDisplayName, SenderFromDomain, SenderIPv4,
          RecipientEmailAddress, Subject, DeliveryAction, DeliveryLocation

Finding more suspicious, potentially spoofed emails:

EmailEvents
| where EmailDirection == "Inbound"
| where Connectors == ""  // No connector used
| where SenderFromDomain in ("contoso.com", "fabrikam.com") // Replace with your accepted domains
| where AuthenticationDetails !contains "SPF=pass" // SPF failed or missing
| where AuthenticationDetails !contains "DKIM=pass" // DKIM failed or missing
| where AuthenticationDetails !contains "DMARC=pass" // DMARC failed or missing
| where SenderIPv4 !in ("") // Exclude known relay IPs
| where ThreatTypes has_any ("Phish", "Spam") or ConfidenceLevel == "High" // 
| project Timestamp, NetworkMessageId, InternetMessageId, SenderMailFromAddress,
          SenderFromAddress, SenderDisplayName, SenderFromDomain, SenderIPv4,
          RecipientEmailAddress, Subject, AuthenticationDetails, DeliveryAction

Microsoft Sentinel

Microsoft Sentinel customers can use the TI Mapping analytics (a series of analytics all prefixed with ‘TI map’) to automatically match the malicious domain indicators mentioned in this blog post with data in their workspace. If the TI Map analytics are not currently deployed, customers can install the Threat Intelligence solution from the Microsoft Sentinel Content Hub to have the analytics rule deployed in their Sentinel workspace.

The below hunting queries can also be found in the Microsoft Defender portal for customers who have Microsoft Defender XDR installed from the Content Hub, or accessed directly from GitHub.

• Spoof and impersonation phish detections
• Spoof attempts with auth failure

Below are the queries using Sentinel Advanced Security Information Model (ASIM) functions to hunt threats across both Microsoft first-party and third-party data sources. ASIM also supports deploying parsers to specific workspaces from GitHub, using an ARM template or manually.

Detect network IP and domain indicators of compromise using ASIM

The following query checks domain and URL IOCs across data sources supported by ASIM web session parser:

//IP list and domain list- _Im_NetworkSession
let lookback = 30d;
let ioc_ip_addr = dynamic(["162.19.196.13", "163.5.221.110", "51.195.94.194", "51.89.59.188"]);
let ioc_domains = dynamic(["2fa.valoufroo.in.net", "valoufroo.in.net", "integralsm.cl", "absoluteprintgroup.com"]);
_Im_NetworkSession(starttime=todatetime(ago(lookback)), endtime=now())
| where DstIpAddr in (ioc_ip_addr) or DstDomain has_any (ioc_domains)
| summarize imNWS_mintime=min(TimeGenerated), imNWS_maxtime=max(TimeGenerated),
  EventCount=count() by SrcIpAddr, DstIpAddr, DstDomain, Dvc, EventProduct, EventVendor

Detect web sessions IP and file hash indicators of compromise using ASIM

The following query checks domain and URL IOCs across data sources supported by ASIM web session parser:

//IP list - _Im_WebSession
let lookback = 30d;
let ioc_ip_addr = dynamic(["162.19.196.13", "163.5.221.110", "51.195.94.194", "51.89.59.188"]);
_Im_WebSession(starttime=todatetime(ago(lookback)), endtime=now())
| where DstIpAddr in (ioc_ip_addr)
| summarize imWS_mintime=min(TimeGenerated), imWS_maxtime=max(TimeGenerated),
  EventCount=count() by SrcIpAddr, DstIpAddr, Url, Dvc, EventProduct, EventVendor

Detect domain and URL indicators of compromise using ASIM

The following query checks domain and URL IOCs across data sources supported by ASIM web session parser:

// file hash list - imFileEvent
// Domain list - _Im_WebSession
let ioc_domains = dynamic(["2fa.valoufroo.in.net", "valoufroo.in.net", "integralsm.cl", "absoluteprintgroup.com"]);
_Im_WebSession (url_has_any = ioc_domains)

Spoofing attempts from specific domains

// Add the list of domains to search for.
let DomainList = dynamic(["2fa.valoufroo.in.net", "valoufroo.in.net", "integralsm.cl", "absoluteprintgroup.com"]); 
EmailEvents 
| where TimeGenerated > ago (1d) and DetectionMethods has "spoof" and SenderFromDomain in~ (DomainList)
| project TimeGenerated, AR=parse_json(AuthenticationDetails) , NetworkMessageId, EmailDirection, Subject, SenderFromAddress, SenderIPv4, ThreatTypes, DetectionMethods, ThreatNames  
| evaluate bag_unpack(AR)  
| where column_ifexists('SPF','') =~ "fail" or  column_ifexists('DMARC','') =~ "fail" or column_ifexists('DKIM','') =~ "fail" or column_ifexists('CompAuth','') =~ "fail"
| extend Name = tostring(split(SenderFromAddress, '@', 0)[0]), UPNSuffix = tostring(split(SenderFromAddress, '@', 1)[0])
| extend Account_0_Name = Name
| extend Account_0_UPNSuffix = UPNSuffix
| extend IP_0_Address = SenderIPv4

Indicators of compromise

References

• https://www.mimecast.com/threat-intelligence-hub/microsoft-direct-send-abuse/
• https://www.proofpoint.com/us/blog/email-and-cloud-threats/attackers-abuse-m365-for-internal-phishing
• https://www.varonis.com/blog/direct-send-exploit

Learn more

For the latest security research from the Microsoft Threat Intelligence community, check out the Microsoft Threat Intelligence Blog.

To get notified about new publications and to join discussions on social media, follow us on LinkedIn, X (formerly Twitter), and Bluesky. To hear stories and insights from the Microsoft Threat Intelligence community about the ever-evolving threat landscape, listen to the Microsoft Threat Intelligence podcast.

The post Phishing actors exploit complex routing and misconfigurations to spoof domains appeared first on Microsoft Security Blog.

In a campaign observed in the first half of 2025, we identified the actor specifically targeting Workday profiles. However, it’s important to note that any SaaS systems storing HR or payment and bank account information could be easily targeted with the same technique. These attacks don’t represent any vulnerability in the Workday platform or products, but rather financially motivated threat actors using sophisticated social engineering tactics and taking advantage of the complete lack of multifactor authentication (MFA) or lack of phishing-resistant MFA to compromise accounts. Workday has published guidance for their customers in their community, and we thank Workday for their partnership and support in helping to raise awareness on how to mitigate this threat.

Microsoft has identified and reached out to some of the affected customers to share tactics, techniques, and procedures (TTPs) and assist with mitigation efforts. In this blog, we present our analysis of Storm-2657’s recent campaign and the TTPs employed in attacks. We offer comprehensive guidance for investigation and remediation, including implementing phishing-resistant MFA to help block these attacks and protect user accounts. Additionally, we provide comprehensive detections and hunting queries to enable organizations to defend against this attack and disrupt threat actor activity.

Analysis of the campaign

In the observed campaign, the threat actor gained initial access through phishing emails crafted to steal MFA codes using adversary-in-the-middle (AITM) phishing links. After obtaining MFA codes, the threat actor was able to gain unauthorized access to the victims’ Exchange Online and later hijacked and modified their Workday profiles.

After gaining access to compromised employee accounts, the threat actor created inbox rules to delete incoming warning notification emails from Workday, hiding the actor’s changes to the HR profiles. Storm-2657 then stealthily moved on to modify the employee’s salary payment configuration in their HR profile, thereby redirecting future salary payments to accounts under the actor’s control, causing financial harm to their victims. While the following example illustrates the attack flow as observed in Workday environments, it’s important to note that similar techniques could be leveraged against any payroll provider or SaaS platform.

Initial access

The threat actor used realistic phishing emails, targeting accounts at multiple universities, to harvest credentials. Since March 2025, we’ve observed 11 successfully compromised accounts at three universities that were used to send phishing emails to nearly 6,000 email accounts across 25 universities.

Some phishing emails contained Google Docs links, making detection challenging, as these are common in academic environments. In multiple instances, compromised accounts did not have MFA enabled. In other cases, users were tricked into disclosing MFA codes via AiTM phishing links distributed through email. Following the compromise of email accounts and the payroll modifications in Workday, the threat actor leveraged newly accessed accounts to distribute further phishing emails, both within the organization and externally to other universities.

The threat actor used several themes in their phishing emails. One common theme involved messages about illnesses or outbreaks on campus, suggesting that recipients might have been exposed. These emails included a link to a Google Docs page that then redirected to an attacker-controlled domain.

Some examples of the email subject lines are:

• COVID-Like Case Reported — Check Your Contact Status
• Confirmed Case of Communicable Illness
• Confirmed Illness

In one instance, a phishing email was sent to 500 individuals within a single organization, encouraging targets to check their illness exposure status. Approximately 10% of recipients reported the email as a suspected phishing attempt.

The second theme involved reports of misconduct or actions by individuals within the faculty, with the goal of tricking recipients into checking the link to determine if they are mentioned in the report.

Some examples of the subject lines are:

• Faculty Compliance Notice – Classroom Misconduct Report
• Review Acknowledgment Requested – Faculty Misconduct Mention

The most recently identified theme involved phishing emails impersonating a legitimate university or an entity associated with a university. To make their messages appear convincing, Storm-2657 tailored the content based on the recipient’s institution. Examples included messages that appear to be official communications from the university president, information about compensation and benefits, or documents shared by HR with recipients. Most of the time the subject line contained either the university name or the university’s president name, further enhancing the email’s legitimacy and appeal to the intended target.

Some examples of the subject lines are:

• Please find the document forwarded by the HR Department for your review
• [UNIVERSITY NAME] 2025 Compensation and Benefits Update
• A document authored by [UNIVERSITY PRESIDENT NAME] has been shared for your examination.

Defense evasion

Following account compromise, the threat actor created a generic inbox rule to hide or delete any incoming warning notification emails from the organization’s Workday email service. This rule ensured that the victim would not see the notification emails from Workday about the payroll changes made by the threat actor, thereby minimizing the likelihood of detection by the victim. In some cases, the threat actor might have attempted to stay under the radar and hide their traces from potential reviews by creating rule names solely using special characters or non-alphabetic symbols like “….” or “\’\’\’\’”.

Persistence

In observed cases, the threat actor established persistence by enrolling their own phone numbers as MFA devices for victim accounts, either through Workday profiles or Duo MFA settings. By doing so, they bypassed the need for further MFA approval from the legitimate user, enabling continued access without detection.

Impact

The threat actor subsequently accessed Workday through single sign-on (SSO) and changed the victim’s payroll/bank account information.

With the Workday connector enabled in Microsoft Defender for Cloud Apps, analysts can efficiently investigate and identify attack traces by examining Workday logs and Defender-recorded actions. There are multiple indicators available to help pinpoint these changes. For example, one indicator from the Workday logs generated by such threat actor changes is an event called “Change My Account” or “Manage Payment Elections”, depending on the type of modifications performed in the Workday application audit logs:

These payroll modifications are frequently accompanied by notification emails informing users that payroll or bank details have been changed or updated. As previously discussed, threat actors might attempt to eliminate these messages either through manual deletion or by establishing inbox rules. These deletions can be identified by monitoring Exchange Online events such as SoftDelete, HardDelete, and MoveToDeletedItems. The subjects of these emails typically contain the following terms:

• “Payment Elections”
• “Payment Election”
• “Direct Deposit”

Microsoft Defender for Cloud Apps correlates signals from both Microsoft Exchange Online (first-party SaaS application) and Workday (third-party SaaS application), enabling thorough detection of suspicious activities that span multiple systems, as seen in the image below. Only by correlating first party and third-party signals is it possible to detect this activity spawning across multiple systems.

Mitigation and protection guidance

Mitigating threats from actors like Storm-2657 begins with securing user identity by eliminating traditional credentials and adopting passwordless, phishing-resistant MFA methods such as FIDO2 security keys, Windows Hello for Business, and Microsoft Authenticator passkeys.

Microsoft recommends enforcing phishing-resistant MFA for privileged roles in Microsoft Entra ID to significantly reduce the risk of account compromise. Learn how to require phishing-resistant MFA for admin roles and plan a passwordless deployment.

Passwordless authentication improves security as well as enhances user experience and reduces IT overhead. Explore Microsoft’s overview of passwordless authentication and authentication strength guidance to understand how to align your organization’s policies with best practices. For broader strategies on defending against identity-based attacks, refer to Microsoft’s blog on evolving identity attack techniques.

If Microsoft Defender alerts indicate suspicious activity or confirmed compromised account or a system, it’s essential to act quickly and thoroughly. Below are recommended remediation steps for each affected identity:

1. Reset credentials – Immediately reset the account’s password and revoke any active sessions or tokens. This ensures that any stolen credentials can no longer be used.
2. Re-register or remove MFA devices – Review users MFA devices, specifically those recently added or updated.
3. Revert unauthorized payroll or financial changes – If the attacker modified payroll or financial configurations, such as direct deposit details, revert them to their original state and notify the appropriate internal teams.
4. Remove malicious inbox rules – Attackers often create inbox rules to hide their activity or forward sensitive data. Review and delete any suspicious or unauthorized rules.
5. Verify MFA reconfiguration – Confirm that the user has successfully reconfigured MFA and that the new setup uses secure, phishing-resistant methods.

Microsoft Defender XDR detections

Microsoft Defender XDR coordinates detection, prevention, investigation, and response across endpoints, identities, email, apps to provide integrated protection against attacks like the threat discussed in this blog.

Customers with provisioned access can also use Microsoft Security Copilot in Microsoft Defender to investigate and respond to incidents, hunt for threats, and protect their organization with relevant threat intelligence.

Hunting queries

Microsoft Defender XDR

The Microsoft Defender for Cloud Apps connector for Workday includes write events such as Workday account updates, payroll configuration changes, etc. These are available in the Defender XDR CloudAppEvents hunting tables for further investigation. Important events related to this attack include but are not limited:

• Add iOS Device
• Add Android Device
• Change My Account
• Manage Payment Elections

Install the Microsoft Defender for Cloud Apps connector for Workday to take advantage of these logging, investigation, and detection capabilities.

Review inbox rules created to hide or delete incoming emails from Workday

Results of the following query may indicate an attacker is trying to delete evidence of Workday activity.

CloudAppEvents 
| where Timestamp >= ago(1d)
| where Application == "Microsoft Exchange Online" and ActionType in ("New-InboxRule", "Set-InboxRule")  
| extend Parameters = RawEventData.Parameters // extract inbox rule parameters
| where Parameters has "From" and Parameters has "@myworkday.com" // filter for inbox rule with From field and @MyWorkday.com in the parameters
| where Parameters has "DeleteMessage" or Parameters has ("MoveToFolder") // email deletion or move to folder (hiding)
| mv-apply Parameters on (where Parameters.Name == "From"
| extend RuleFrom = tostring(Parameters.Value))
| mv-apply Parameters on (where Parameters.Name == "Name" 
| extend RuleName = tostring(Parameters.Value))

Review updates to payment election or bank account information in Workday

The following query surfaces changes to payment accounts in Workday.

CloudAppEvents 
| where Timestamp >= ago(1d)
| where Application == "Workday"
| where ActionType == "Change My Account" or ActionType == "Manage Payment Elections"
| extend Descriptor = tostring(RawEventData.target.descriptor)

Review device additions in Workday

The following query looks for recent device additions in Workday. If the device is unknown, it may indicate an attacker joined their own device for persistence and MFA evasion.

CloudAppEvents 
| where Timestamp >= ago(1d)
| where Application == "Workday"
| where ActionType has "Add iOS Device" or ActionType has "Add Android Device"
| extend Descriptor = tostring(RawEventData.target.descriptor) // will contain information of the device

Hunt for bulk suspicious emails from .edu sender

The following query identifies email from .edu senders sent to a high number of users.

EmailEvents
| where Timestamp >= ago(7d)
| where SenderFromDomain has "edu" or SenderMailFromDomain has "edu"
| where EmailDirection == "Inbound"
| summarize dcount(RecipientEmailAddress), dcount(InternetMessageId), make_set(InternetMessageId), dcount(Subject), dcount(NetworkMessageId), take_any(NetworkMessageId) by bin(Timestamp,1d), SenderFromAddress
| where dcount_RecipientEmailAddress > 100 // number can be adjusted, usually the sender will send emails to around 100-600 recipients per day

Hunt for phishing URL from identified .edu phish sender

If a suspicious .edu sender has been identified, use the following query to surface email events from this sender address.

EmailEvents
| where Timestamp >= ago(1d)
| where SenderFromAddress == ""
| where EmailDirection == "Inbound"
| project NetworkMessageId, Subject, InternetMessageId
| join EmailUrlInfo on NetworkMessageId
| where Timestamp >= ago(1d)
| project Url, NetworkMessageId, Subject, InternetMessageId

Hunt for user clicks to suspicious URL from the identified .edu phish sender (previous query)

If a suspicious .edu sender has been identified, use the below query to surface user clicks that may indicate a malicious link was accessed.

EmailEvents
| where Timestamp >= ago(1d)
| where SenderFromAddress == ""
| where EmailDirection == "Inbound"
| project NetworkMessageId, Subject, InternetMessageId
| join UrlClickEvents on NetworkMessageId
| where Timestamp >= ago(1d)
| project AccountUpn, Subject, InternetMessageId, DetectionMethods, ThreatTypes, IsClickedThrough // these users very likely fall into the phishing attack

Microsoft Sentinel

Install the Workday connector for Microsoft Sentinel. Microsoft Sentinel has a range of detection and threat hunting content that customers can use to detect the post exploitation activity detailed in this blog.

Microsoft Sentinel customers can use the TI Mapping analytics (a series of analytics all prefixed with ‘TI map’) to automatically match the malicious domain indicators mentioned in this blog post with data in their workspace. If the TI Map analytics are not currently deployed, customers can install the Threat Intelligence solution from the Microsoft Sentinel Content Hub to have the analytics rule deployed in their Sentinel workspace.

Malicious inbox rule

The query includes filters specific to inbox rule creation, operations for messages with ‘DeleteMessage’, and suspicious keywords.

let Keywords = dynamic(["helpdesk", " alert", " suspicious", "fake", "malicious", "phishing", "spam", "do not click", "do not open", "hijacked", "Fatal"]);
OfficeActivity
| where OfficeWorkload =~ "Exchange" 
| where Operation =~ "New-InboxRule" and (ResultStatus =~ "True" or ResultStatus =~ "Succeeded")
| where Parameters has "Deleted Items" or Parameters has "Junk Email"  or Parameters has "DeleteMessage"
| extend Events=todynamic(Parameters)
| parse Events  with * "SubjectContainsWords" SubjectContainsWords '}'*
| parse Events  with * "BodyContainsWords" BodyContainsWords '}'*
| parse Events  with * "SubjectOrBodyContainsWords" SubjectOrBodyContainsWords '}'*
| where SubjectContainsWords has_any (Keywords)
 or BodyContainsWords has_any (Keywords)
 or SubjectOrBodyContainsWords has_any (Keywords)
| extend ClientIPAddress = case( ClientIP has ".", tostring(split(ClientIP,":")[0]), ClientIP has "[", tostring(trim_start(@'[[]',tostring(split(ClientIP,"]")[0]))), ClientIP )
| extend Keyword = iff(isnotempty(SubjectContainsWords), SubjectContainsWords, (iff(isnotempty(BodyContainsWords),BodyContainsWords,SubjectOrBodyContainsWords )))
| extend RuleDetail = case(OfficeObjectId contains '/' , tostring(split(OfficeObjectId, '/')[-1]) , tostring(split(OfficeObjectId, '\\')[-1]))
| summarize count(), StartTimeUtc = min(TimeGenerated), EndTimeUtc = max(TimeGenerated) by  Operation, UserId, ClientIPAddress, ResultStatus, Keyword, OriginatingServer, OfficeObjectId, RuleDetail
| extend AccountName = tostring(split(UserId, "@")[0]), AccountUPNSuffix = tostring(split(UserId, "@")[1])
| extend OriginatingServerName = tostring(split(OriginatingServer, " ")[0])

Risky sign-in with new MFA method

This query identifies scenarios of risky sign-ins tied to new MFA methods being added.

let mfaMethodAdded=CloudAppEvents
    | where ActionType =~ "Update user." 
    | where RawEventData has "StrongAuthenticationPhoneAppDetail"
    | where isnotempty(RawEventData.ObjectId) and isnotempty(RawEventData.Target[1].ID)
    | extend AccountUpn = tostring(RawEventData.ObjectId)
    | extend AccountObjectId = tostring(RawEventData.Target[1].ID)
    | project MfaAddedTimestamp=Timestamp,AccountUpn,AccountObjectId;
    let usersWithNewMFAMethod=mfaMethodAdded
    | distinct AccountObjectId;
    let hasusersWithNewMFAMethod = isnotempty(toscalar(usersWithNewMFAMethod));
    let riskySignins=AADSignInEventsBeta
    | where hasusersWithNewMFAMethod
    | where AccountObjectId in (usersWithNewMFAMethod)
    | where RiskLevelDuringSignIn in ("50","100") //Medium and High sign-in risk level.
    | where Application in ("Office 365 Exchange Online", "OfficeHome")
    | where isnotempty(SessionId)
    | project SignInTimestamp=Timestamp, Application, SessionId, AccountObjectId, IPAddress,RiskLevelDuringSignIn
    | summarize SignInTimestamp=argmin(SignInTimestamp,*) by Application,SessionId, AccountObjectId, IPAddress,RiskLevelDuringSignIn;
    mfaMethodAdded
    | join riskySignins on AccountObjectId
    | where MfaAddedTimestamp - SignInTimestamp < 6h //Time delta between risky sign-in and device registration less than 6h
    | project-away AccountObjectId1

Microsoft Security Copilot

Security Copilot customers can use the standalone experience to create their own prompts or run the following prebuilt promptbooks to automate incident response or investigation tasks related to this threat:

• Incident investigation
• Microsoft User analysis
• Threat actor profile
• Threat Intelligence 360 report based on MDTI article
• Vulnerability impact assessment

Note that some promptbooks require access to plugins for Microsoft products such as Microsoft Defender XDR or Microsoft Sentinel.

Acknowledgments

We would like to thank Workday for their collaboration and assistance in responding to this threat.

Workday customers can refer to the guidance published by Workday on their community: https://community.workday.com/alerts/customer/1229867.

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